The former Manchester United and Real Madrid star was honoured ahead of his country's European Championship Group J qualifier in Reykjavik with a Guinness World Records certificate.
And Ronaldo, 38, who broke Kuwait forward Bader Al-Mutawa's 196-cap record in March, scored the only goal of the game in the closing stages with his 123rd for Portugal.
Iceland were reduced to 10 men after 80 minutes when Willum Willumsson was sent off.
After four matches played, Portugal sit two points clear of Slovakia, who won 1-0 at Liechtenstein thanks to Denis Vavro's first-half strike.
In the group's other fixture, Luxembourg secured a 2-0 win at Bosnia.
Manchester City's Erling Haaland continued his incredible scoring run with a double in Norway's 3-1 victory against Cyprus.
After Ola Solbakken netted Norway's opener in the Group A clash, Haaland scored two goals - one from the penalty spot - in four second-half minutes to end the season with a remarkable 56 strikes for club and country, and contribute to Norway's first win of their qualifying campaign.
Romelu Lukaku put his Champions League final disappointment behind him with a brace in Belgium's 3-0 win at Estonia.
Lukaku, who made a second-half appearance for Inter Milan in their defeat against City earlier this month, scored twice in the first half to put the visitors in control.
Johan Bakayoko completed a comfortable Group F win for the Red Devils with a third in the closing minutes.
Belgium remain three points adrift of Austria, who stay top of the group following a late victory against Sweden.
The fixture looked to be heading for a goalless draw before Christoph Baumgartner netted a brace for the home side. Austria have played one game more than Belgium.
In Group G, Hungary took top spot after winning 2-0 against Lithuania, while Serbia secured a 1-1 draw in Bulgaria following Darko Lazovic's stoppage-time equaliser.
Meanwhile, in Group E, Barcelona's Robert Lewandowski scored for Poland but could not stop his side from slipping to a 3-2 defeat in Moldova as Albania claimed a 3-1 win in the Faroe Islands.