The village spreads around the bottum of a bay and grows into the surrounding steep hills. The city-center is located close to the harbour with quite a lot of shops and services. The harbour in Fuglafjordur is busy. There is fishing-industry, a slip, production of trawl and also oil-depots. In the 1970s there was a terrible stink from the fishing-industry but that has been solved now.

In the 1840s the small village Hellur in north of Fuglafjordur was established. Yet this village never grew large and now inhabits approximately 30 of the municipality's inhabitants.

In the 1980s the suburb of Kambsdalur was established, and now about 180 of the population in the municipality live here. In Kambsdalur there is also a large industrial cluster, the educational centre of the northeastern Faroes and the regional Sportscentre used mainly for handball, volleyball and in-door football.

In the past years Fuglafjordur has also grown famous for its newly established cultural-centre in the city-centre that has become one of the main cultural attrations in Eysturoy.