As the first level of schooling, preschools are part of the educational system in Iceland. All preschools operate according to Preschool Act. No. 90/2008 and the National Curriculum Guidelines, where the emphasis is on children's learning through play and high-quality practice. The aim of this study was to shed light on how the first wave of COVID-19 and the ensuing restrictions influenced preschool practice in Iceland and preschool teacher agency. Data regarding participating preschool teachers' and principals' perceptions of the influence of COVID-19 on teachers' practice and on their sense of agency was gathered through mixed methods, namely interviews and questionnaires. The findings show that school restrictions considerably influenced the practice. Children's groups were smaller than usual, which had a positive influence on play and quality of the schooling, according to the participants. This study is an important contribution to the preschool community and creates knowledge and understanding of the influence of the first wave of COVID-19 on preschool practice. Furthermore, the findings motivate further reflections on how preschool practice is organised in relation to quality early childhood education.