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In 1898 Spain lost the Spanish-American War. Cuba gained its independence, and Spain lost its remaining New World colonies—Guam, the Philippines, and Puerto Rico—to the United States. Spain's colonial possessions were reduced to Spanish Morocco, Western Sahara and Equatorial Guinea.

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.

At present, Spain is a constitutional monarchy, and is comprised of 17 autonomous communities. One of the most important problems facing Spain today is ETA's terrorism - this illegal organization defends Basque independence through violent means, which is condemned by both Central and Basque government, although there is tension between these governments since PNV (the party presently governing Basque Country) longs for greater autonomy from Spain, including the possibility of independence, something Spanish government doesn't accept.

Until 1714, Spain was a loose confederation of kingdoms and statelets, under the same king, until King Philip V removed the autonomous status of the Aragonese crown. Moreover, the creation of a unified state in the 19th and 20th centuries has lead to the present situation, apparently simple, but sometimes extremely confusing. During the Second Spanish Republic (1931-1936), the Basque and Catalan were given limited self-government, which was lost after the Spanish Civil War (1936-1939) and restored in 1978 during the transition to democracy.

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 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.

Around 1,100 BC Phoenician merchants founded the trading colony of Gadir or Gades (modern day Cádiz) near Tartessos. In the 8th century BC the first Greek colonies, such as Emporion (modern Empúries), were founded along the Mediterranean coast on the East, leaving the south coast to the Phoenicians. The Greeks are responsible for the name Iberia, after the river Iber (Ebro in Spanish). In the 6th century BC the Carthaginians arrived in Iberia while struggling with the Greeks for control of the Western Mediterranean. Their most important colony was Carthago Nova (Latin name of modern day Cartagena).

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".

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.

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.

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.

A revived movement for the Christian unification of Spain was capitalized on by the "Catholic monarchs" (Reyes Católicos in Spanish) Isabel I of Castilla and Fernando II of Aragón in order to justify their invasion of Granada, the expulsion of the Jews and the forceful conversion of the Moors. In the 15th century, the Kingdoms of Castile and Aragon were united under Isabel and Fernando. These two able rulers ruled jointly and worked to consolidate the power of the monarchy at the expense of the nobility. During their reign, the castles of many nobles (symbols of aristocratic independence from the monarchy) were demolished, and a system of regular taxation was established. Fernando and Isabel established the basis for the unification of Spain religiously as well as politically and economically.

Madrid, the capital of Spain, is located in the center of the country. Population of the city of Madrid proper was 3,093,000 as of 2003 estimates.

Madrid is home to Real Madrid, the world's most successful football club (according to FIFA). There are three other major teams, the Primera Division club Atlético de Madrid, Getafe Club de Futbol and Rayo Vallecano.