When Europe witnessed the beginnings of the Enlightenment, Spain was also included in this process. The dynasty of Bourbons ruled the country during this period. The Seven Years’ War with Britain resulted in Spain regaining some of its lost territories. However, at the end of this period, Spain lost its economic and political advantage to Britain, Germany and France.

Philip V, who was of French origin, was the first monarch from the Bourbon Dynasty. He signed an important document (decree) known as the Decreto de Nueva Planta, or the ‘Decree of the New Regime’, in the year 1715. This decree was a new law that annulled most of the previously signed rights and privileges of other kingdoms that subdued the Spanish Crown to different obligations, collecting them under the laws of Castile. Spain became politically and culturally similar to absolutist France (where the Bourbons originated). The next generation of the Bourbons, Ferdinand VI and Charles III, carried on with the same policy.

Under the reign of Charles III and his three ministers, Spain launched a program of enlightened despotism that ushered Spain into sudden prosperity in the second half of the eighteenth Century. After being an ally with France and losing to Britain in the Seven Years' War, Spain regained most of her territorial losses in the American Revolutionary War. The conquering spirit of Charles III was completely depleted in the reign of his son, Charles IV. Some historians believe he was even mentally deranged. He was heavily influenced by his wife’s lover. Ultimately, his policy ruined what his father had achieved. This also led to the separation of big territories of New Spain. The weakness of the country was noticed by no one other than Napoleon Bonaparte, who invaded Spain in 1808, which resulted in the Peninsular War.

Ruled by the Bonaparte Dynasty, Spain did not enter into the Industrial Revolution as did other countries in Europe. Spain quickly fell behind Britain, France and Portugal.

During the Enlightenment a lot of major artists produced work. One of the most significant pieces was by Francisco José de Goya (1746–1828). His work (painting, frescoes among others) started jolly and light only to become more and more grey and pessimistic, thus reflecting the political and cultural situation in Spain at the time.