Studies of interglacial successions are critical to our understanding of the environmental history of an area. Analyses of macrofossil remains of plants and invertebrates from Eemian sediments exposed in a coastal cliff section at Borooyarvik near Klaksvik, Bordoy, northeastern Faroe Islands, indicate that the sediments accumulated in a coastal lagoon. The fossil flora comprises tree birch Betula sect. Albae and we suggest that birch forests were found locally at sheltered sites in the area. Tree birch also occurred on the islands during the mid-Holocene. The only other woody plant recovered from the Eemian deposit is the dwarf-shrub Empetrum nigrum, which is common on the islands today. Remains of herbaceous plants are rare but include Viola, Ajuga, Myosotis, Urtica dioica and Ranunculus. The bryophyte flora is species-rich and most of the fragments belong either to stream species or to species of humid or wet habitats. The fossil flora and fauna also comprise a number of freshwater species that probably lived in an oligotrophic lake and in streams in the catchment of the lagoon. The climate during deposition of the lagoonal sediments was similar to the Holocene oceanic climate of the Faroe Islands. The study adds to our understanding of Eemian environments in the North Atlantic region and helps to fill a knowledge gap about the history of the flora and fauna of the Faroe Islands, which is of biogeographical importance.