The volcano has a history of erupting about twice a century. With its last eruption having come in 1918, 93 years ago, it is well behind schedule.
Volcano experts point to signs like an increasing number of small earthquakes in the area around Katla, The Daily Telegraph of London reported. One quake last week hit magnitude 4 on the Richter scale.
David Rothery of Britain's Open University said the volcano is at least as likely to subside as to erupt. He described volcanoes as unpredictable.
"These things do not just ramp up, they come in pulses. By this time next week there might be lots of earthquakes and the volcano might be swelling," he added.
Katla is in southern Iceland, north of the coastal town of Vik i Myrdal. It is partly covered by a glacier and its last eruption caused major flooding.
The eruption of the neighboring Eyjafjallajokul last year sent an ash cloud into the air that disrupted air traffic over the Atlantic Ocean for weeks. Airlines lost an estimated $1.6 billion because of canceled or re-routed flights.