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Under the Bonaparte, Spain failed to embrace the mercantile and industrial revolutions of the 18th century, and also failed to absorb the ideals that of the Enlightenment that were revolutionizing European thought. These missed opportunities, combined with the economic failures of the 17th century, caused the country to fall desperately behind Britain, France, and Germany in economic and political power.

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).

The dictatorship of Miguel Primo de Rivera collapsed in 1930. Disgusted with the king's involvement in it, urban population voted for republican parties in the municipal elections of April 1931. The king was forced to resign and a republic was established.

The latter years of Franco's rule saw some economic and political liberalization, the so-called Spanish Miracle, including the birth of a tourism industry. Francisco Franco ruled until his death on November 20th 1975 when control was given to King Juan Carlos. In the last few months before Franco's death, the Spanish state went into a paralysis. This was capitalized upon by King Hassan of Morocco, who ordered the 'Green March' into Western Sahara, Spain's last colonial possession.

Spain's natural surroundings have helped shape the culture of the nation. The success of the Basques in maintaining a separate culture over a period of millennia has doubtless been aided by the mountainous geography of their region. Several separate parts of Spain have strong maritime traditions, including inland ports on rivers: Seville, for example, was a major port until the Guadalquivir silted up. Since the availalability of mass air transport, Spain's Mediterranean beaches, especially those along the Costa del Sol, have drawn millions of tourists, providing considerable revenue (and enormous contact with the outside world) to a long-depressed and isolated area of the country.

Philip V, the first Bourbon king, of French origin, signed the Decreto de Nueva Planta in 1715, a new law that revoked most of the historical rights and privileges of the different kingdoms that conformed the Spanish Crown, unifying them under the laws of Castile, where the Cortes had been more receptive to the royal wish. Spain became culturally and politically a follower of France. The rule of the Spanish Bourbons continued under Ferdinand VI and Charles III. His son Carlos IV was truly incompetent (some say mentally handicapped), and under his reign Spain fell to the armies of Napoleon.