Yes, Keflavik Airport (KEF) has a lounge, so if you searched keflavik airport lounge or iceland airport lounge, the answer is straightforward: the Icelandair Saga Lounge sits in the departures area after security. No, it is not a Priority Pass lounge, so if you are asking is there a priority pass lounge in Keflavik, a plain membership card will not open the door here, though it does buy you something useful close by.
The KEF airport lounge is the Icelandair Saga Lounge, a calm, comfortable business lounge with seating, complimentary food and drinks, and Wi-Fi. It is usually open daily year-round from early morning until the early hours, roughly 5am to 1am, to match Iceland's spread-out transatlantic and European schedule. Entry is tied to Icelandair Saga Premium fares, premium cabins or elite status on partner airlines, and certain Icelandic credit cards. It does not sell single-entry day passes and it does not accept Priority Pass or similar lounge memberships for admission.
If a Priority Pass is your only credential, you are not entirely without options at Keflavik. Priority Pass holders can use a dining credit at the Elda restaurant airside, a set amount toward food and drink per eligible visit, which is the practical way to get value from the card at this particular airport. It will not substitute for the Saga Lounge itself, so plan around your actual fare or status rather than the membership.
For most travellers asking about a business lounge in Keflavik, the honest picture is: one lounge, tied to Icelandair, with a workaround for Priority Pass through the dining credit rather than the lounge door. If you hold a qualifying Saga Premium ticket or partner status, arrive with time to enjoy the space before boarding. If not, the Elda credit or the airside cafes and restaurants are the realistic fallback, particularly during the busy early-morning and late-evening waves when transatlantic flights cluster. Confirm your specific access route with your airline or card issuer before you travel, since terms can shift season to season.