The water comes up from deep underground, where it has been heated by the same volcanic rocks that make geysers boil. By the time it reaches the surface, it is full of minerals - tiny bits of natural stuff from the rocks - including silica, which gives the water its famous milky colour.
All over Iceland, families bathe outdoors in geothermal pools like this one. Almost every town has its own community pool, heated by the Earth, open all year round. Children swim outside in their swimsuits even in snowstorms, with steam rising into the cold air around them.
The Blue Lagoon is also good for skin. The silica forms a white mud at the bottom that people scoop up and put on their face like a mask. It looks very funny - a whole pool of people walking about with white faces - but the mud is gentle and soft.
In winter, bathing at the Blue Lagoon is magical. Your body is warm in the water, but the air around you is freezing. Sometimes the Northern Lights swirl across the sky above the steam. It is one of the most unusual places to swim anywhere on Earth.