The1996 Icelandic Men's Football League Cup was the first staging of theIceland League Cup. It featured 34 teams. The competition started on 14 March 1996 and concluded on 15 May 1996 withÍA beatingBreiðablik 3–1 in the final.
The 34 teams were divided into 5 groups of 6 teams and 1 group of 4 teams, with the top two teams from each group qualifying for the quarter-finals. The semi finals then consisted of 2 groups each of 3 teams. The teams played each other once with the top team in each group going through to the final.