This chapter outlines the principal characteristics of the Spanish urban system and the place of the major cities in it; the main trends in the internal transformation of the large urban areas are analysed using a series of basic variables. It deals with the characteristics of the administrative structure and of the system used to finance large cities in Spain. The chapter includes the core of the report. It explores the specific problems and potentialities of the large cities, and describes the principal instruments of national intervention. In Spain, local government financing is regulated by the Ley Reguladora de las Haciendas Locales of 1988. Under this law, municipalities obtain income from five main sources: local taxes, municipal charges levied on the use of public facilities, income from assets, inter-administrative transfers and public debt. The internationalization of the Spanish urban economies has resulted in an extraordinary increase in their external connections.