We perform a multi-scale impact assessment of tephra fallout and dispersal from explosive volcanic activity in Iceland. A companion paper (Biass et al., 2014; “A multi- scale risk assessment of tephra fallout and airborne concen- tration from multiple Icelandic volcanoes – Part I: hazard assessment”) introduces a multi-scale probabilistic assess- ment of tephra hazard based on selected eruptive scenarios at four Icelandic volcanoes (Hekla, Askja, Eyjafjallajökull and Katla) and presents probabilistic hazard maps for tephra accumulation in Iceland and tephra dispersal across Europe. Here, we present the associated vulnerability and impact as- sessment that describes the importance of single features at national and European levels and considers several vulnera- bility indicators for tephra dispersal and deposition. At the national scale, we focus on physical, systemic and economic vulnerability of Iceland to tephra fallout, whereas at the Eu- ropean scale we focus on the systemic vulnerability of the air traffic system to tephra dispersal. This is the first vulnerabil- ity and impact assessment analysis of this type and, although it does not include all the aspects of physical and systemic vulnerability, it allows for identifying areas on which further specific analysis should be performed. Results include vul- nerability maps for Iceland and European airspace and allow for the qualitative identification of the impacts at both scales in the case of an eruption occurring. Maps produced at the na- tional scale showthat tephra accumulation associated with all eruptive scenarios considered can disrupt the main electricity network, in particular in relation to an eruption of Askja. Re- sults also show that several power plants would be affected if an eruption occurred at Hekla, Askja or Katla, causing a sub- stantial systemic impact due to their importance for the Ice- landic economy.Moreover, the Askja and Katla eruptive sce- narios considered could have substantial impacts on agricul- tural activities (crops and pastures). At the European scale, eruptive scenarios at Askja and Katla are likely to affect Eu- ropean airspace, having substantial impacts, in particular, in the Keflavík and London flight information regions (FIRs), but also at FIRs above France, Germany and Scandinavia. Impacts would be particularly intense in the case of long- lasting activity at Katla. The occurrence of eruptive scenarios at Hekla is likely to produce high impacts atKeflavík FIR and London FIRs, and, in the case of higher magnitude, can also impact France's FIRs. Results could support land use and emergency planning at the national level and risk manage- ment strategies of the European air traffic system. Although we focus on Iceland, the proposed methodology could be applied to other active volcanic areas, enhancing the long- term tephra risk management. Moreover, the outcomes of this work pose the basis for quantitative analyses of expected im- pacts and their integration in a multi-risk framework.