Born in East-Iceland in 1929, Magnús Pálsson studied theatre design and art in the early 1950s and became an active participant in Iceland's embryonic avant-garde, collaborating with alternative theatre groups as well as with other artists such as Dieter Roth and later the SUM-group of young artists that formed in 1965.

Art allowed Magnús to extend his theatre and break up the perceived boundaries between different forms of expression. His first private exhibition was in 1967 where he exhibited hollow torsos made of paper, glue and paint, along with plaster. Plaster became his favoured medium for plastic art in the late 1960s and early 1970s as he focused on casting various "impossible" subjects, such as the empty spaces between things. Perhaps his best known piece of this kind is a cast of the space between the three wheels of a helicopter and its landing field, seconds before the it actually touched down. This work, made in 1976, was seen in Venice in 1980 when Magnús represented Iceland at the Biennale.

Magnús' profound influence in Icelandic art goes even beyond his trailblazing art and performances. In the 1970s and 1980s he devoted much of his time to teaching and many of the Icelandic artist whose work has been most influential in the last twenty years started as his student. Magnús has also dealt with this aspect of his work in artworks and exhibitions under the title: "Teaching: The Crasiest Art Form."

The Reykjavík Art Museum held a large retrospective exhibition of Magnús' art in 1994 and published a catalogue which remains today the best overveiw of his work.