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Madrid was first mentioned in the 10th cent. as a Moorish fortress. Alfonso VI of Castile drove out the Moors in 1083. The Cortes of Castile met in Madrid several times, and Ferdinand and Isabella as well as Emperor Charles V often resided there, but Madrid became the capital of Spain only in 1561, in the reign of Philip II. The city developed slowly at first, but it expanded rapidly in the 18th century under the Bourbon kings (especially Charles III). From that period date the royal palace and the Prado.

At the beginning of the Peninsular War a popular uprising against the French took place at Madrid on May 2, 1808, and a fierce battle was fought in the Puerta del Sol, the city's central square. In reprisal, hundreds of citizens were shot at night along the Prado promenade. The events of that day were immortalized by two of Goya's most celebrated paintings, both in the Prado gallery.

Madrid again played a heroic role in the Spanish civil war (1936-39), when, under the command of Gen. José Miaja, it resisted 29 months of siege by the Nationalists, suffering several bombardments and air attacks and surrendering, thus ending the war, only late in Mar., 1939.

Following the Nationalist victory, General Franco began a nearly 40-year rule of Spain. Although Madrid remained the capital, it was deeply scarred by the war. During the first 15 years of Franco's rule, Madrid was impoverished due to a lack of capital and industry. The economy gradually improved after 1950, bringing a flood of people into Madrid. The Franco government, however, had few resources and no policy to deal with this immigration. As a result Madrid became surrounded with huge temporary slums. After 1960 the government began a massive housing program to construct thousands of cheaply built high-rise apartments, and by 1970 most of the temporary slums had been eliminated.

After Franco's death in 1975, life in Madrid changed as Spain shifted to a system of democratic government.

In 1983 Madrid became the capital of the Autonomous Community of Madrid, which was created under a 1981 law. The region grew as an industrial centre to become the wealthiest autonomous community in Spain. In 1992 Madrid was designated as the cultural capital of Europe, which focused international attention on the city and its arts.