Referring to models suggested by sociologists (Heilbron 1996, 1999; de Swaan 2001), the Nordic countries are here viewed as a subsystem of a wider translational system. Within this subsystem Finland and Iceland occupy peripheral positions and thus Finnish-Icelandic literary exchange depended for a long time on central Scandinavia as a mediator. In the past decades, however, contacts between Finland and Iceland have multiplied and Finnish-Icelandic translations are now done without resort to a mediating language. Still, the Nordic context, with its institutional support, remains the framework within which Finnish-Icelandic literary exchange has developed. And as commercial motives only rarely predominate, much of this exchange is due to personal contacts and friendship between translators, authors, publishers etc. The Finnish-Icelandic exchange can furthermore be seen as an example of how peripheral dependency has been overcome as more translational relations of equal calibre have been established.