Here are three takeaways from the game.
Nigeria, for all their possession, failed to trouble Iceland's defence and did not have one shot on target as the first half ended goalless.
For Argentina nothing but a win will do, although even that may not be enough if Iceland win, with qualification then coming down to which of the two sides finishes with the better goal difference.
"Fantastic, fantastic, it was a good match, we are very grateful to have won it, it is very good for Nigeria, we are all happy! said a Nigerian fan". Nigeria's victory also gave underachieving Argentina, home of the legendary Lionel Messi, a puncher's chance of saving its own World Cup campaign.
"This group is going to be decided in the last minutes, in the last game". Having started the day bottom of the group, they find themselves second - three points behind Croatia, who have already qualified for the knockout stage.
Iceland were pressuring Nigeria towards the 65th minute as they went in search for an equaliser, but they lacked quality in the final third.
Nigeria are now on a World Cup losing streak of three games, their worst run since losing four matches between 1998 and 2002.
But they missed the pace of winger Johann Berg Gudmundsson who was injured in the Argentina game. Credit Gernot Rohr for recognising that he needed to change his strategy, and drop the players who underperformed in the first game.
Iceland had its chances in the first half, dominating play but failing to convert its free kicks and long passes into a goal.
Iceland boss Heimir Hallgrimsson: "It's a odd fact that we are still in the race".
Argentina - will advance if they beat Nigeria and Iceland don't beat Croatia.
Meanwhile Nigeria captain Jon Obi-Mikel has criticised Croatia manager Zlatko Dalic for stating that he will rest players for their last game against Iceland.
In major tournaments (World Cup and European Championships), Iceland have lost just one of their six matches in total (W2 D3 L1).
His words: "Since I have been in Nigeria for two years now we play Mikel in this role as an offensive midfielder".