Icelandic has a phonological process which devoices sonorants after voiced segments in domain-final position, but to date the category of the relevant domain and potential further factors affecting it have not been identified. The present paper studies final devoicing of /l/, by which /l/ is realized as the voiceless lateral fricative [􏰀l] in domain-final position. It reports on the results of an experimental reading study designed to test the exact environments of this process and the implications for a prosodic hierarchy for Icelandic. The results suggest that devoicing of /l/ is bound by the prosodic utterance. All instances of /l/ were devoiced in utterance final position. Within the utterance, final devoicing is optional, but the frequency of its application reflects the syntactic and prosodic hierarchy such that it is most frequent at a clause/an IP-boundary, significantly less frequent at a syntactic XP-edge and it almost never occurs within a syntactic XP.