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The Iberian Peninsula has been occupied for many millennia. Some of Europe's most impressive Paleolithic cultural sites are located here - the famous caves at Altamira contain spectacular paintings that date from around 12,000 BC. However, evidence of human habitation goes back nearly 800,000 years with the discovery of Europe’s oldest human remains in Spain. The Basques are the first identifiable people of the peninsula and are the oldest surviving group in Europe. Iberians arrived from North Africa during a more recent period.

Beginning in the ninth century
BC, Phoenicians, Greeks, Carthaginians, and Celts entered the Iberian Peninsula, followed by the Romans, who arrived in the second century BC. Spain's present language, religion, and laws stem from the Roman period. Although the Visigoths arrived in the fifth century AD, the last Roman strongholds along the southern coast did not fall until the seventh century AD. In 711, North African Moors sailed across the straits, swept into Andalusia, and, within a few years, pushed the Visigoths up the peninsula to the Cantabrian Mountains. The Reconquest-efforts to drive out the Moors-lasted until 1492. By 1512, the unification of present-day Spain was complete.

During the 16th century, Spain became the most powerful nation in Europe, due to the immense wealth derived from its presence in the Americas. But a series of long, costly wars and revolts, capped by the defeat by the English of the "Invincible Armada" in 1588, began a steady decline of Spanish power in Europe. Controversy over succession to the throne consumed the country during the 18th and 19th centuries, leading to occupation by France in the early 1800s.

The
19th century saw the revolt and independence of most of Spain's colonies in the Western Hemisphere; three wars over the succession issue; the brief ousting of the monarchy and establishment of the First Republic (1873-74); and, finally, the Spanish-American War (1898), in which Spain lost Cuba, Puerto Rico, and the Philippines to the United States. A period of dictatorial rule (1923-31) ended with the establishment of the Second Republic. It was dominated by increasing political polarisation, culminating in the leftist Popular Front electoral victory in 1936. Pressures from all sides, coupled with growing and unchecked violence, led to the outbreak of the Spanish Civil War in July 1936.

Following the victory of his nationalist forces in 1939, Gen. Francisco Franco ruled a nation exhausted politically and economically. Spain was officially neutral during World War II but followed a pro-Axis policy. The victorious Allies isolated Spain at the beginning of the postwar period, and the country did not join the United Nations until 1955. In 1959, under an International Monetary Fund stabilization plan, the country began liberalising trade and capital flows, particularly foreign direct investment.

Despite the
success of economic liberalisation, Spain remained the most closed economy in Western Europe - judged by the small measure of foreign trade to economic activity - and the pace of reform slackened during the 1960s as the state remained committed to "guiding" the economy.

Nevertheless, in the 1960s and 1970s, Spain was transformed into a modern industrial economy with a thriving tourism sector. Its economic expansion led to improved income distribution, and helped develop a large middle class. Social changes brought about by economic prosperity and the inflow of new ideas helped set the stage for Spain's transition to democracy during the latter half of the 1970s.

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