Background The frequency of preterm births has been increasing globally, mainly due to a rise in iatrogenic late preterm births. The aim of this study was to assess the prevalence of preterm births in Iceland during 1997‐2016 by type of preterm birth. Methods This study included all live births in Iceland during 1997‐2016 identified from the Icelandic Medical Birth Registry. Risk of preterm birth by time period was assessed with Poisson regression models adjusted for demographic variables and indications for iatrogenic births. Results The study population included 87 076 infants, of which 4986 (5.7%) were preterm. The preterm birth rate increased from 5.3% to 6.1% (adjusted rate ratio [ARR] = 1.16, confidence interval [CI] = 1.07‐1.26) between 1997‐2001 and 2012‐2016 overall. The increase was only evident in multiples (ARR 1.41, 95% CI 1.21‐1.65), not singletons (1.07, 0.97‐1.19). The rate of late preterm births (34‐36 weeks) increased significantly (1.24, 1.14‐1.40), and the rate of iatrogenic preterm births more than doubled during this period even after adjustment for identified medical indications (2.40, 2.00‐2.88). The rate of spontaneous preterm births decreased during the study period (0.63, 0.55‐0.73), and the rate of PPROM increased (1.31, 1.09‐1.57). The most common contributing indications for iatrogenic births were fetal distress (26.2%), hypertensive disorders (18.2%), and severe preeclampsia (16.9%). Conclusions Preterm birth rates increased in multiples in Iceland between 1997 and 2016, and late and iatrogenic preterm births increased overall. The increase in iatrogenic preterm births remained significant after adjusting for medical indications, suggesting that other factors might be affecting the rise.