Horses suffered nasal discharge, dry coughing and laryngitis. Some developed mild conjunctivitis.
The first cases were reported in early April 2010.
In the days following, it became apparent that the disease was already widespread and that an epidemic could not be avoided.
A four-month halt was subsequently placed on the export of horses from Iceland, which was due to expire on September 15.
A significant number of Iceland's horses caught the disease. No deaths were reported and the symptoms were generally mild, with horses making a full recovery.
However, the outbreak hobbled the horse industry for a time and resulted in economic losses for commercial breeders.
Some horses throughout Iceland still exhibit symptoms and the infection has lingered among stallion groups and other groups, especially where infected horses have come into contact with healthy susceptible horses.
Experience has shown that horses that have caught the disease can catch it again.
However, the horse population is showing signs of increased resistance to the infectious agent and indirect infection appears to be declining, officials said.
Animal health officials say a better understanding of the causes of the disease and the growing resistance among horses are now serving as valuable tools in closing infection routes and minimising the rate of infection within certain groups.
Extensive research by respected research bodies in Iceland and abroad suggests the bacteria, Streptococcus Zooepidemicus, is the main and probably the only cause of the disease.
The bacteria has been cultivated from all samples from horses exhibiting coughing and running nose with coloured mucous.
It has not been possible to link the disease to any known virus in horses and there are no indications that the causes of the disease are viral or immunosuppressive in nature.
Streptococcus Zooepidemicus is a known infectious agent in horses worldwide, although epidemics of this severity have not been recorded to date.
The incubation period is long and it can take 3-4 weeks to determine whether a horse is infected within an isolated group.
Infection caused by Streptococcus Zooepidemicus is not among the diseases notifiable to the World Organisation for Animal Health (OIE) and no restrictions have been imposed on the export of horses from Iceland.
However, European Union states demand that the horses they receive be free of disease and that the same applies to other horses they have been in contact with for the preceding 30 days (60 days when exporting to United States).
Iceland's Food and Veterinary Authority has imposed a requirement that all horses to be exported must be kept in isolated groups on farms - "a kind of home quarantine", for at least 30 days before export (60 days when exporting to the US.)
Owners are responsible for the quarantine and monitoring of their horses and a veterinarian will assess the quarantine and health of the horses to ensure that horses are symptom-free before export as an extra security measure.
A declaration by the owner and veterinarian stating that the horses are free of symptoms and that proper quarantine measures were employed must be issued for each horse and accompany it.
Experts who pinpointed the source of the infection as Streptococcus Zooepidemicus had tested for a raft of possible infections, including Equine alfaherpesvirus type 1 and 4 (EHV-1 and 4), Equine gammaherpesvirus 2 and 5 (EHV- 2 and 5), Equine arteritis virus (EAV), Equine adenovirus type 1 (EadV-1), pan-influenzavirus A, Equine influenza A, pan-Reovirus, Equine rhinitis virus A (ERAV), Equine rhinovirus type 3 (ErhV-3), parainfluenzavirus type 3.
A recent report on Visir.is reports that Iceland's chief epidemiologist, Haraldur Briem, has confirmed a case of the infection in a person. He noted that doctors had not been routinely screening for the disease until now.