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Aims: The aim of this study was to explore differences in self-rated health and physician-diagnosed disease across geographical regions in Iceland to better understand regional requirements for health services., Methods: Data on self-rated health and diagnosed disease from a 2007 national health survey (n=5909; response rate 60.3%) across geographic regions were analysed. Area of residence was classified according to distance from the Capital Area (CA) and availability of local health services. We used regression models to calculate crude and multivariable adjusted odds ratios (aOR) and corresponding 95% confidence intervals (95% CI) of self-rated health and diagnosed diseases by area of residence. Models were adjusted for age, gender, education, civil status, and income., Results: Residents in rural areas with no local health service supply rated their physical health worse than residents of areas with diverse supply of specialised services (aOR 1.40, 95% CI 1.21-1.61). Residents outside the CA rate both their physical (aOR 1.35, 95% CI 1.23-1.50) and mental (aOR 1.17, 95% CI 1.06-1.30) health worse than residents in the CA. In contrast, we observed a lower prevalence of several diagnosed chronic diseases, including cancers (aOR 0.78, 95% CI 0.60-0.99) and cardiovascular disease (aOR 0.77, 95% CI 0.62-0.95) outside the CA., Conclusions: These findings from a national survey of almost 6000 Icelanders indicate that self-rated health is related to regional healthcare supply. The findings have implications for national planning of health services aiming at equality both in health and access to health services.