The Foundation of the Cult of St. Thorlac, the first bishop confessor of Iceland, in the years 1195-1199, was a complicated affair involving the ecclesiastical and worldy elites of Iceland, Norway, Denmark and the Papal States, in a time of diplomatic crisis in Europe. The events are fairly well documented in preserved Latin fragments, Old Norse translations of lost Latin texts, as well as in contemporary saga narratives and letters. It is therefore still possible to plot a timeline of the practical arrangements for the establishement of the cult and make comprehensible the political controversies raised by this ecclesiastical act, politics which significantly shaped the hagiographical record of Thorlac's sainthood. The paper will present this material together with a new interpretation of it, which the author has been working on in recent years and has partly published in a series of articles.