A moratorium on hunting fin whales was imposed in 1985 and the mammal is classified as an endangered species and placed on a "red list" compiled by the World Conservation Union.
But Iceland says the mammal is plentiful in the north Atlantic and confirmed the catch via a spokesman on Saturday.
"One fin whale was caught today and will be landed tomorrow," said Rune Froevik of the Norwegian High North Alliance, which represents the interests of Arctic hunting and fishing communities.
He said the whale was up to 21 metres long.
Reykjavik is seeking to catch nine fin whales and 30 minke whales in the year to August 31, 2007, fishing officials announced on Tuesday.
By resuming commercial whaling, Australian politicians said Iceland was "sticking two fingers" up to the rest of the world.
"This is not just sticking a harpoon into a species that's endangered," said Ian Campbell, the country's environment minister.
"This is really sticking two fingers in the air at the entire global community; entire international, environmental [and] institutional arrangements."
Iceland has hunted minke whales since 2003, saying the activity was for scientific research, and along with Norway the two are the only nations that sanction commercialised whaling.
Japan allows whaling, but says it is for research purposes.
Reykjavik argues that it is harvesting whales in line with other marine resources around Iceland, such as cod.
Many countries say that whale stocks are still too uncertain to allow catches and argue that harpooning is cruel.
Blue whales, the world’s biggest mammal, are among species that have been hunted close to extinction.
Whaling nations argue that stocks of some species have recovered since the moratorium.
Iceland says there are about 70,000 minke whales and 25,800 fin whales in the central North Atlantic region.
Froevik said that Iceland had hunted some fin whales as part of a scientific research programme in the late 1980s but had not caught any commercially since 1985.