This research investigates residents' knowledge and perception of the Katla volcano and emergency response procedures in all rural and urban communities located in the eastern and southern Katla hazard zones. Using a questionnaire survey conducted in 2008, we demonstrate that there is an apparent difference between rural and urban communities' knowledge and perceptions, and identify some of the issues influencing residents' perspectives and behaviour. All rural and most urban residents have an accurate knowledge of Katla, the proposed warning system and emergency response plan. Urban residents perceived the emergency response plan to be appropriate. In comparison, rural residents did not perceive the emergency response plan as appropriate. Rural residents stated that they would personally assess the situation before deciding on a course of action independent of the proposed plan. Livelihood connections and inherited knowledge affect rural residents' ability and willingness to comply with the recommended procedures. Factors such as hazard knowledge, sense of community and attachment to place indicate that rural residents are more resilient to volcanic hazards. Based on our findings we recommend that emergency management agencies consider issues such as personal responsibility, neighbourliness and community involvement and cooperation, to develop and implement more appropriate volcanic risk mitigation strategies. In light of the recent Eyjafjallajökull eruptions, we provide a brief discussion on the 2010 emergency response. Although our findings are Iceland-specific, our recommendations may be applied internationally to other volcanic and disaster-prone regions.