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The 20th century initially brought little peace; colonisation of Western Sahara, Spanish Morocco and Equatorial Guinea was attempted as a substitute for the loss of the Americas. A period of dictatorial rule (1923-1931) ended with the establishment of the Second Spanish Republic. The Republic offered political autonomy to the Basque Country and Catalonia and gave voting rights to women. However, with increasing political polarisation and pressure from all sides, coupled with growing and unchecked political violence, the Republic ended with the outbreak of the Spanish Civil War in July 1936. Following the victory of the nationalist forces in 1939, General Francisco Franco ruled a nation exhausted politically and economically until his death in 1975.

Through a policy of alliances with other European nobility and the conquest of most of South America and the West Indies, Spain began to establish itself as an empire. The Treaty of Tordesillas, negotiated by Pope Alexander VI between Portugal and Spain, effectively divided up the non-European world between these two budding empires. Massive amounts of gold and silver were imported from the New World into Spain's coffers. However, in the long run this hurt the Spanish economy much more than it helped it. The bullion caused high inflation rates, which undermined the value of Spain's currency. Additionally, Spain became dependent on her colonies for income, and when Queen Elizabeth I of England began to capture Spanish vessels on the way to and from the New World, Spain suffered massive economic losses. These effects, combined with the expulsion of Spain's most economically vital classes in the late 15th century (the Jews and the Moors), caused Spain's economy to collapse several times in the 16th century, bringing the Golden Age of Spain to a close.

In 711, Arabs and Berbers had converted to Islam, a religion founded in the 7th century by prophet Muhammad and which by the 8th dominated all the north of Africa. A raiding party led by Tariq ibn-Ziyad was sent to intervene in a civil war in the Visigothic kingdoms in Iberia. Crossing the Strait of Gibraltar, it won a decisive victory in the summer of 711 when the Visigoth king Roderic was defeated and killed on July 19th at the Battle of Guadalete. Tariq's commander, Musa bin Nusair quickly crossed with substantial reinforcements, and by 718 the Muslims dominated most of the peninsula. The advance into Europe was stopped by the Franks under Charles Martel at the battle of Poitiers (France) in 732.

In the 1960s, more than a decade later than other western European countries, Spain began to enjoy economic growth and gradually transformed into a modern industrial economy with a thriving tourism sector. Growth continued well into the 1970s, with Franco's government going to great lengths to shield the Spanish people from the effects of the oil crisis.

Mistreatment of the Moorish population in Morocco led to an uprising and the loss of all North African possessions except for the enclaves of Ceuta and Melilla in 1921. Abd el-Krim, Annual. In order to avoid accountability, the king Alfonso XIII decided to support the dictatorship of general Miguel Primo de Rivera.

Except for the subtropical Canary Islands, Spain can be divided into areas experiencing, respectively, a Mediterranean climate; a climate dominated by the Atlantic Ocean; and (in the inner areas) a rather extreme climate with hotter summers and colder winters than nearer the coasts. The generally warm and relatively dry summers have led to a culture in which a lot of life is lived outdoors, whether on a patio in the courtyard of a building or on a public plaza. In Madrid, many of the most popular nightclubs move for several months in the summer to an outdoor terrasa much farther from the center of town than their indoor winter location, continuing in a way the older tradition of the verbena (fair). In the Mediterranean areas (and in the Canary Islands), outdoor meals can be a nearly year-round phenomenon.

The Romans arrived in the Iberian peninsula during the Second Punic war in the 2nd century B.C., and annexed it under Augustus after two centuries of war with the Celtic and Iberian tribes and the Phoenician, Greek and Carthaginian colonies becoming the province of Hispania. Some of Spain's present languages, religion, and laws originate from this Roman period.

Spain was part of the Roman Empire and many areas of Spain retain significant Roman architectural remnants. The Roman aqueduct at Segovia is still in use as of 2004; Mérida, now the Extermaduran capital but once the capital of the Roman province of Lusitania, retains over 5 miles of its Roman aqueduct, Roman bridge over the River Guadiana, an arch of Trajan, and significant remnants of a Roman forum, amphitheatre, and a temple popularly accounted to have been dedicated to Diana (goddess). Another Roman bridge crosses the Tagus River at Alcántara. Lesser Roman ruins can be found in the heart of Barcelona.

The most important minority group in the country are the Gitanos. Other indigenous minorities are Mercheros (or Quinquis) and Vaqueiros de alzada.- The latter, meaning "Mountain cow-breeders" dwell in mountain ranges in the Principality of Asturias and have kept historically apart from the valley dwellers. Foreign minorities include South Americans from countries like Argentina, Ecuador or Colombia; black Africans; Arabs and Berbers mainly from Morocco and other countries of North Africa; and Asians from China, Japan, Korea, and Vietnam.

The original peoples of the Iberian peninsula (in the sense that they are not known to have come from elsewhere), consisting of a number of separate tribes, are given the generic name of Iberians. This may have included the Basques, the only pre-Celtic people in Iberia surviving to the present day as a separate ethnic group. The most important culture of this period is that of the city of Tartessos. Beginning in the 9th century BC, Celtic tribes entered the Iberian peninsula through the Pyrenees and settled throughout the peninsula, becoming the Celt-Iberians.

As recently as the mid-20th-century, much of Spain (especially outside of the major cities) remained quite distinct from the rest of Europe. In 1954, V.S. Pritchett could still write of small Spanish towns, "The inn, if there is one, will not be a hotel, nor even a fonda — the Arab word — but perhaps a posada: a place one can ride into with a mule or a donkey, where one can stable an animal and lie down oneself on a sack of straw, the other side of the stall." [Pritchett, 1954 p. 46-47] However, especially since the 1975 death of Francisco Franco, Spain has become increasingly European; Pritchett's rustic posada would be unimaginable today.

While the siesta — an hours-long mid-afternoon break from work — is generally in decline, the typical rhythm of the day in Spain remains relatively distinct from the European norm. Many shops and some museums (though relatively few other businesses) still split their hours into two distinct periods of opening with a two or three hour break in the middle; a paseo (stroll) in the early evening remains a common custom in many smaller cities and to some extent even in the larger ones; the dinner hour is the latest in Europe, typically about 10 p.m.; nightlife begins accordingly late, with many dance clubs (even in relatively small cities) opening at midnight and staying open until dawn; in Madrid in the summer there is nothing unusual about a live musical performance being scheduled for one or two o'clock in the morning.

The most well-known variety of Spanish folk music is likely flamenco, a diverse genre created by Andalusian Roma. Flamenco is known since at least the 1770s, and has been through several cycles of dwindling popularity and rebirth. The style has produced many of the most famous Spanish musicians, including singer Camarón de la Isla and guitarist Carlos Montoya. Outside of flamenco, regional Spanish folk music includes the distinct Basque trikitrixa and accordion music, Galician and Asturian gaita (bagpipe) and Aragonese jota. Though some folk traditions have died out or are moribund, some retain great popularity and have been modernized and adapted to new instruments, styles and formats. These include the popular Celtic music of Galicia, the singer-songwriter tradition of nova canço and New Flamenco.