For nearly 40 years, Francisco Franco controlled Spain's destiny – playing his political supporters off against each other and maintaining the order of the victors of the Civil War while gradually liberalizing the Spanish economy.

Through clever tactics, as well as the deaths of many political rivals, Francisco Franco had placed himself at the head of the insurgent military as the unrestricted Caudillo por la gracia de Dios ("leader by the grace of God"). He was to rule the country for 40 years, upholding the deep rift between the victors and the vanquished of the Civil War. The regime's catalog of enemies included everything that ran counter to the ideology of "eternal Spain," with its guidelines of nation, church, and family. Above all, internationalist-minded and progressive-thinking individuals came under constant fire: socialists, communists, anarchists, Freemasons, Protestants, atheists, and homosexuals were branded as "anti-Spaniards." Unlike in the Nazi state, Jews were less likely to be targeted by the state's inflammatory ideology. In this sense, the Catholic Church was a counterweight to the anti-Semitic Falange party. Within his regime, which political scientist Juan Linz described as "authoritarian" in distinction to democracy and totalitarianism, Franco skillfully played various groups of his supporters – fascist Falangists, conservative monarchists, devout Catholics – off against each other.

Internationally, Spain remained isolated after the end of World War II, which Franco had kept his country out of. Since the victorious Allied powers had no interest in cooperating with a dictator branded as fascist, Spain was not admitted to NATO, nor did it benefit from the economic support of the Marshall Plan. Economically, the 1940s in Spain were disastrous. The Civil War had destroyed the country’s infrastructure, and the vanquished of the Civil War had to work to a large extent as forced laborers under life-threatening conditions at the Guadalquivir Canal, in the Miranda de Ebro labor camp or on prestige projects such as the monument "The Valley of the Fallen." In total, an estimated 150,000 people lost their lives in the wave of post-war repression. Hardly any convinced republican, communist or socialist did not face permanent disadvantages in job allocation and pay in Franco's "New State."

After the end of World War II, Franco sought to project a moderate image of Spain as a conservative "beacon of the West" against Soviet communism. The United States now gradually relaxed its sanctions against the dictator. In 1953, Washington and Madrid concluded a military base agreement, in 1955 Spain was admitted to the United Nations, and in 1959 US President Eisenhower visited Madrid. In 1966, the "organic state law," a sham democratic constitution, divided the power between Franco as the head of state, a crown council appointed by him, and a rubber stamp parliament as the legislative chamber. With the cabinet reshuffle of 1957, Franco gave the starting signal for the economic opening of the country. Economic liberal experts and technocrats from the Catholic Opus Dei now took the initiative. The Stability Pact of 1959 opened the country to foreign currency. European tourists now flocked to a country in which political prisoners were still occasionally executed with the medieval-style choking iron (garrote vil).