The King and Queen of Spain live in the Zarzuela Palace, which is utilized for state ceremonies and solemn events, rather than the Royal Palace in Madrid.

The largest royal palace in Western Europe2 and one of the largest in the world, it has 135,000 m2 and 3,418 rooms. It houses the Stradivarius Palatinos and notable collections of painting, sculpture, and tapestry. When there are no official events, the state rooms and art collections are open.

Despite being in the westernmost area of Madrid, the Franco dictatorship called it the Palacio de Oriente because it was located in the Plaza de Oriente, which was to the east of the palace. The Teatro Real (Royal Theatre) faces the palace at the other end of the square.

King Philip V ordered the construction of the palace on the site of the Real Alcázar, which burned almost completely in 1734. The new palace was built atop the ancient Alcázar's foundations and structures. The fire justified replacing the old building with a palace in style. at 1738, architect Filippo Juvara began building a grander palace at a different location. After Juvara died, his follower Juan Bautista Sachetti had to adjust his ideas to the ancient Alcázar. Ventura Rodríguez, a famous Spanish architect, helped design the Royal Chapel.5 Francesco Sabatini oversaw construction completion, reform, extension, and decoration. Charles III lived at the palace constantly.

Manuel Azaña, president of the Second Republic, was the last head of state to live in the palace, occupying Queen María Cristina's apartments. Alfonso XIII was the last king. This was the National Palace. The Royal Chapel's "Azaña's office" still exists.

The palace's interior features works of art by Caravaggio, Velázquez, Francisco de Goya, Corrado Giaquinto, Giovanni Battista Tiepolo, and Anton Raphael Mengs, as well as noble materials used in its construction. The structure houses the Royal Armoury, ceramics, watches, furniture, and silverware.

The Royal Palace and other Crown-owned assets are managed by Patrimonio Nacional, an autonomous organization within the Ministry of the Presidency.

The Royal Palace was Spain's sixth most visited landmark in 2016 with 1.4 million visitors.