By the time that Egil came out to Iceland from this journey, the whole district was settled. All the original land-takers were dead, but their sons or sons' sons were living, and dwelt there in the district.

Ketil Gufa came to Iceland when the country was almost fully settled, and spent the first winter at Gufuskalar in Rosmhvalaness. Ketil had come from Ireland and brought a good number of Irish slaves with him. All the land in Rosmhvalaness had been claimed by then, so Ketil crossed over from there to the Nesses and spent the next winter at Gufuness, though he found no place to live there either. After that he travelled up to Borgafjord and spent the third winter there at a place since known as Gufuskalar. The river that runs into the sea where he kept his ship over winter is called the Gufu River.

At that time, Thord Lambason was living at Lambastead. He was married with a fully-grown son called Lambi, a tall lad, strong for his years. In the summer when people went to the Thing, Lambi decided to ride there too.

By this time Ketil Gufu had gone west to Breidafjord in search of a place to live. Then his slaves ran away, and one night they came to Thord's house at Lambastead, set fire to it, and burned Thord to death there with all his household. Then they broke open his store-house and carried goods and valuables outside, drove in some horses, loaded them with packs and went over to Alftaness.

That morning about sunrise Lambi came back home. He had seen the fire during the night. He had several men with him and rode off at once in search of the slaves, while people from the other farms came to join him. When the slaves saw they were being followed, they dropped their loot and tried to get away. Some ran west through Myrar, others down to the sea till they came to a fjord. Then Lambi and his men came up and killed the one named Kori there, and the place has been called Koraness ever since, but the slaves named Skorri, Thormod and Svart dived into the sea and started swimming away from the shore.

Lambi and his men began searching among the boats, then rowed after the slaves. At Skorra Isle they came on Skorri and killed him there, then rowed out to Thormod's Skerry where they killed Thormod, after whom the skerry takes its name, and so caught up with the other slaves at the places named after them.

After that, Lambi farmed at Lambastead. He was a good farmer, physically very powerful but no trouble-maker. Ketil Gufa travelled west across Breidafjord and made his home at Thorskafjord. Gufu Dale and Gufufjord are named after him. He married Yri, the daughter of Geirmund Hell-Skin and their son was Vali.

There was a man named Grim, son of Sverting; he dwelt at Moss-fell below the heath; rich was he and of good family; his sister was Rannveig whom Thorod, the priest in Olvos, had to wife; their son was Skapti the lawman. Grim was also afterwards lawman. He asked to wife Thordis daughter of Thorolf Egil's brother, and stepdaughter of Egil. Egil loved Thordis no whit less than his own children. She was a very beautiful woman. And since Egil knew that Grim was a wealthy man and the match was a good one, it was so settled, and Thordis was given to Grim. Then Egil paid over to her her father's heritage, and she went home with Grim, and the pair dwelt long at Moss-fell.

Þá er þetta var tíðenda, at Egill var út kominn ór þessi ferð, þá var heraðit albyggt. Váru þá andaðir allir landnámamenn, en synir þeira lifðu eða sonarsynir, ok bjuggu þeir þá í heraði.

Ketill gufa kom til Íslands, þá er land var mjök byggt. Hann var inn fyrsta vetr at Gufuskálum á Rosmhvalanesi. Ketill hafði komit vestan um haf af Írlandi. Hann hafði með sér þræla marga írska. Lönd váru öll byggð á Rosmhvalanesi þann tíma. Réðst Ketill því þaðan í brott ok inn á Nes ok sat annan vetr á Gufunesi ok fekk þar engan ráðstafa. Síðan fór hann inn í Borgarfjörð ok sat þar inn þriðja vetr, er síðan er kallat at Gufuskálum, en áin Gufuá, er þar fellr í ofan, er hann hafði skip sitt um vetrinn.

Þórðr Lambason bjó þá á Lambastöðum. Hann var kvángaðr ok átti son, er Lambi hét. Hann var þá vaxinn maðr, mikill ok sterkr at jöfnum aldri. Eftir um sumarit, þá er menn riðu til þings, reið Lambi til þings. En Ketill gufa var þá farinn vestr í Breiðafjörð at leita þar um bústaði.

Þá hljópu þrælar hans á brott. Þeir kómu fram um nótt at Þórðar á Lambastöðum ok báru þar eld at húsum ok brenndu þar inni Þórð ok hjón hans öll, en brutu upp búr hans ok báru út gripi ok vöru. Síðan ráku þeir heim hross ok klyfjuðu ok fóru síðan út til Álftaness.

Þann morgin um sólarupprásarskeið kom Lambi heim, ok hafði hann sét eldinn um nóttina. Þeir váru nökkurir menn saman. Hann reið þegar at leita þrælanna. Ríða þar menn af bæjum til. móts við hann. Ok er þrælarnir sá eftirför þá, stefndu þeir undan, en létu lausan ránsfeng sinn. Hljópu sumir á Mýrar út, en sumir út með sjó, til þess at fjörðr var fyrir þeim. Þá sóttu þeir Lambi eftir þeim ok drápu þar þann, er Kóri hét, - því heitir þar síðan Kóranes, - en Skorri ok Þormóðr ok Svartr gengu á kaf ok summu frá landi. Síðan leituðu þeir Lambi at skipum ok reru at leita þeira ok fundu þeir Skorra í Skorraey ok drápu hann þar. Þá reru þeir út til Þormóðsskers ok drápu þar Þormóð. Er við hann skerit kennt. Þeir hendu þrælana enn fleiri, þar sem síðan eru örnefni við kennd.

Lambi bjó síðan at Lambastöðum ok var gildr bóndi. Hann var rammr at afli. Engi var hann uppivöðslumaðr.

Ketill gufa fór síðan vestr í Breiðafjörð ok staðfest-ist í Þorskafirði. Við hann er kenndr Gufudalr ok Gufufjörðr. Hann átti Ýri, dóttur Geirmundar heljarskinns. Váli var sonr þeira.

Grímr hét maðr ok var Svertingsson. Hann bjó at Mosfelli fyrir neðan Heiði. Hann var auðigr ok ættstórr. Rannveig var systir hans sammæðra, er átti Þóroddr goði í Ölfusi. Var þeira sonr Skafti lögsögu-maðr. Grímr var ok lögsögumaðr síðan. Hann bað Þórdísar Þórólfsdóttur, bróðurdóttur Egils ok stjúpdóttur. Egill unni Þórdísi engum mun minna en sínum börnum. Hon var in fríðasta kona. En fyrir því at Egill vissi, at Grímr var maðr göfugr ok sá ráðakostr var góðr, þá var þat at ráði gert. Var Þórdís gift Grími. Leysti Egill þá af hendi föðurarf hennar. Fór hon til bús með Grími, ok bjuggu þau lengi at Mosfelli.