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Archeological investigations show that humans have lived in or around what is now Madrid for more than 100,000 years.

Madrid´s appearance in the history books begins, however, in the ninth century, when Cordoban emir Abderraman II built a fortress here to defend the local population against attacks from Castile and Leon.

Madrid's Muslim era came to a close in 1085 when hegemony over the region was handed to King Alfonso VI of Castile. Although its population is thought to have numbered around 12,000 at this time, the town's status remained only marginal. Municipal power was concentrated in the hands of a small number of local families, who managed to hold on to their position when royally-appointed governors attempted to wrest control in 1348.

While Madrid remained on the fringe of things, great events were happening in the rest of the country: Isabel and Ferdinand united the Castilian and Aragonese Crowns in 1474; Granada, the last Muslim stronghold on the peninsula, fell in 1492; and in the same year, Columbus set sail on the journey that would bring Spain untold wealth. Isabel and Ferdinand's grandson, Carlos I, succeeded not only to the throne of Spain but also to that of the Habsburgs, becoming Holy Roman Emperor over territories stretching from Austria to Holland and from Spain to the American colonies.

During the XV-th century, the city became the usual residence of the Royal family. In the XVI-th century, Madrid had about 17.000 inhabitants and it was then, that the King Felipe II moved the Royal Court and transformed Madrid into capital. During this period Madrid suffered a great architectural and cultural expansion, known as the Golden Age with writers as Cervantes, Lope de Vega, etc.

Over the following century, Spain went to ruin, bled dry by a succession of wars and burdened by massive inflation caused in part by the stream of gold that came from the Americas. The country's leaders gold squandered money on lavish palaces and churches and on operations against Italy, Flanders, Turkey, etc. The architectural grandeur was designed to impress, but the misery in which most of the population lived made mockery of such regal splendor. Madrid became a city of immigrants, with the population expanding to 150,000 in 1656; however this population growth was only due to the presence of the Royal court in Madrid.

Habsburg Spain came to a whimpering end in 1700 with the death of the sickly Carlos II, who neglected to leave a successor. A branch of the French royal Bourbon family took the thrown in Madrid. Madrid enjoyed significant changes during the 18th century, when city gates, bridges and new buildings gave it a new appearance. The Royal Palace (also called the Eastern Palace - Palacio de Oriente) was constructed on the site of the ruins of the Alcazar or old Moorish Castle which had been destroyed by fire in 1734. After 1738 Juan B. Sachetti directed the construction work on the Palace, helped out to some extent by Ventura Rodríguez and developing on original plans made by Juavera. The work was practically completed by 1760.

On the 2nd of May 1808 a popular revolt started in the Puerta del Sol, initiating the War of Independence. There are numerous place names in Madrid dedicated to these patriotic disturbances, the most significant being of course the Plaza Dos de Mayo in Malasaña. Once General Castaños had repelled the invaders in Bailén, he entered Madrid on 23rd August 1808. However, there were further battles when Emperor Napoleon presented himself in Chamartín and also in December of the same year when José Bonaparte entered Spain, only to be expelled three years later under pressure from the Anglo-Hispanic army led by Wellington. The last of the French left Madrid on the 27th May 1813 and the following year King Fernando VII entered the city.

Politically, things were a mess, with alternating coups between conservative and liberal wings of the army, the shortlived republic of 1873 and the restoration of the Bourbon monarchy in 1875. Spain ended the century ignominiously, losing its navy and remaining colonies (Cuba, Puerto Rico and the Philippines) to the USA. The first decades of the 20th century saw improvements in Madrid such as the electrification of the tramlines, the creation of the Gran Vía and the inaugural metro line. Inward migration caused the city's population to double from a 1900 figure of half a million to almost one million by 1931. With housing shortages chronic, Madrid's politics were becoming radicalised.

The coup led by Miguel Primo de Rivera in 1923 and endorsed by Alfonso XIII to attempt to form a stable government was brought down by the same Alfonso XIII in 1930, as discontent amongst students, intellectuals and the artillery corps against the dictator was unsustainable. The era that followed soon became known as "the soft dictatorship", contrasting with the previous dictatorship. However, opposition to the Crown and calls for constitutional reform, led by the Socialists in the PSOE and the UGT, were growing stronger resulting in the 1931 elections that saw a coalition of Republicans and socialists gain power. The Second Republic was proclaimed, universal suffrage was introduced, Alfonso XIII left the country and Madrid was officially recognized as the capital of the Spanish State. The happiness of those days was sadly short-lived as party infighting, calls for revolution, a series of crippling strikes and the bloody repression of the miners revolt by General Francisco Franco’s soldiers saw the country precariously poised between right and left. The situation reached boiling point when the National Front lost to the left-wing Popular Front in the elections of February 1936. In July 1936 the inevitable bloody three year civil war was begun by rebel troops in North Africa led by Franco. Madrid held the nationalists at bay, with fighting heaviest in the north-west of the city, until their surrender March 1939.

The victorious Franco made Madrid his home, ushering in decades of poverty, repression and chronic overcrowding. Economic woes lessened in the 1960s with increased foreign investment but discontent was on the rise. Franco died in 1975, having earlier named Juan Carlos, the grandson of Alfonso XIII, his successor. With King Juan Carlos on the throne, Spain made the transition from dictatorship to democracy with the appointment of a moderate conservative government. Opposition parties and trade unions were legalised, and a new constitution was written. Madrid's first free municipal elections were held in 1979, and power has since been shuffled between left-wing and right-of-centre councils. Recent years have seen the revival of artistic and cultural activity in the city, the restoration of the old centre, and improved public transport and public housing. The city's nightlife is perhaps not as vibrant as it was in the celebratory late 1970s and 80s, but Madrid remains a remarkably lively, happening city.

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