The lichenCetraria islandica(L.) Ach. has been used in traditional and modern medicines for its many biological properties such as immunological, immunomodulating, antioxidant, antimicrobial, and anti-inflammatory activities. This species is gaining popularity in the market, with interest from many industries for selling as medicines, dietary supplements, and daily herbal drinks. This study profiled the morpho-anatomical features by light, fluorescence, and scanning electron microscopy; conducted an elemental analysis using energy-dispersive X-ray spectroscopy; and phytochemical analysis was performed using high-resolution mass spectrometry combined with a liquid chromatography system (LC-DAD-QToF) ofC. islandica. In total, 37 compounds were identified and characterized based on comparisons with the literature data, retention times, and their mass fragmentation mechanism/s. The identified compounds were classified under five different classes, i.e., depsidones, depsides, dibenzofurans, aliphatic acids, and others that contain simple organic acids in majority. Two major compounds (fumaroprotocetraric acid and cetraric acid) were identified in the aqueous ethanolic and ethanolic extracts ofC. islandicalichen. This detailed morpho-anatomical, EDS spectroscopy, and the developed LC-DAD-QToF approach forC. islandicawill be important for correct species identification and can serve as a useful tool for taxonomical validation and chemical characterization. Additionally, chemical study of the extract ofC. islandicaled to isolation and structural elucidation of nine compounds, namely cetraric acid (1), 9′-(O-methyl)protocetraric acid (2), usnic acid (3), ergosterol peroxide (4), oleic acid (5), palmitic acid (6), stearic acid (7), sucrose (8), and arabinitol (9).