In assessments of modern Spain’s economic progress and living standards inadequate natural resources, inefficient institutions, lack of education and entrepreneurship, and foreign dependency are frequently blamed for the poor performance up to mid-twentieth century, but no persuasive arguments are provided to explain why such adverse circumstances reversed, giving way to the fast transformation of the last half a century. It makes sense, hence, to inquire firstly how much economic progress has Spain achieved and what impact had on living standards and income distribution since the end of the Peninsular War to the present and, only then, to provide an interpretation. Recent research supports the view that income per person has improved remarkably, driven by increases in labour productivity, which derived, in turn, from a more intense and efficient use of physical and human capital per worker. Exposure to international competition represented a decisive element behind growth performance. In European perspective, Spain underperformed up to 1950. Thereafter, Spain’s economy caught up with advanced countries until 2007. Although the distribution of the fruits of growth did not follow a linear trend, but a Kuznetsian inverted U pattern, higher levels of income per capita are matched by lower inequality suggesting that Spaniards’ material well-being improved substantially during the modern era.