Shetland Islands, a group of more than 100 islands in the Atlantic Ocean, forming the northernmost part of Scotland. The bleak, virtually treeless islands lie about 110 miles (180 km) northeast of the Scottish mainland. The total area is 550 square miles (1,425 km2). Only 16 of the islands are inhabited. Mainland, the largest, is the site of Lerwick, the principal town. Other islands include Yell, Unst, Fetlar, Whalsey, and Bressay.
The islanders live primarily by fishing and the raising of sheep and cattle. Only a few hardy crops, such as barley, oats, and potatoes, are grown. The Shetlanders are noted for their handmade knit goods and as the original breeders of Shetland ponies. North Sea oil has brought previously unknown prosperity to the islands. A large oil terminal is at Sullom Voe.
The Shetlands were originally settled by the Picts in about 200 B.C. In 875 A.D. the islands were annexed by the king of Norway. They remained a Norwegian possession until 1468, when they were mortgaged to Scotland as collateral against the payment of the dowry of Princess Margaret of Norway. The dowry was never paid, and Scotland annexed the islands in 1472.