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In 1499, about 50,000 Moors in Granada were coerced by Cardinal Cisneros into mass baptisms and conversion. During the uprising that followed (known as the First Rebellion of the Alpujarras), people who refused the choices of baptism or deportation to Africa, were systematically eliminated. What followed was a mass flee of Moors, Jews and Gitanos from Granada city and the villages to the mountain regions (and their hills) and the rural country, however by 1500 Cisneros reported that "There is now no one in the city who is not a Christian, and all the mosques are churches".

Spanish rule in Morocco ended in 1956. Though militarily victorious in the 1957-1958 Moroccan invasion of Spanish West Africa, Spain gradually relinquished its remaining African colonies. Spanish Guinea was granted independence as Equatorial Guinea in 1968, while the Moroccan enclave of Ifni had been ceded to Morocco in 1969.

After World War II, being one of few surviving fascist regimes in Europe, Spain was politically and economically isolated and was kept out of the United Nations until 1955, when it became strategically important for U.S. president Eisenhower to establish a military presence in the Iberian peninsula. This opening to Spain was aided by Franco's rabid anti-communism.

The Napoleonic invasion gave the opportunity to the American colonies, led by Libertadores, to claim their independence. Between 1810 and 1824, Chile, Colombia, Ecuador, Venezuela, and the other colonies declared and won their independence. The only New World colonies Spain was left with were the islands of Cuba and Puerto Rico. The Allies fought Napoleon's forces in the Peninsular War, with Joseph Bonaparte ruling as king at Madrid. In 1812 the Cortes took refuge at Cádiz and created the first modern Spanish constitution, the Constitution of 1812 (informally named La Pepa).

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.

The Complutense University is one of the oldest universities in the world, as well as the largest and (after Salamanca) most prestigious in Spain. It has 10000 staff and a student population of 117 000. It is located on two campuses, in the university quarter Ciudad Universitaria at Moncloa in Madrid, and in Somosaguas.

Modern Spain began to take form during the Reconquista, the struggle between the Christian kingdoms arising in the northern regions left unconquered by the Moors and the Muslim kingdoms into which Al-Andalus eventually split.

Spain suffered a shocking terrorist attack, the March 11, 2004 Madrid attacks on its capital's commuter train network, killing 200. Al-Qaeda has been blamed for this attack. Some have attributed the fall of the Aznar government to this attack, which took place just two days before the 2004 elections. At first the public believed ETA was responsible for the bombing. When they learned Al-Qaeda was the true culprit, many voters lashed out at the media and Aznar's government, believing the two had colluded to deceive the public.

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 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.