Spain constitutes a prominent case of how strong institutional arrangements can favor party system stabilization for a long period. However, the economic crisis and other additional challenges, such as territorial conflicts or the citizens’ dissatisfaction generated by continuous corruption scandals, have fostered major changes in party competition. The breakthrough of new political forces (i.e. the radical leftist Podemos and the liberal Ciudadanos) has recently jeopardized the traditional predominance of the main parties (i.e. the conservative PP and the socialist PSOE) at the forefront of the country’s political dynamics. This chapter discusses to what extent the December 2015 and June 2016 parliamentary elections have changed the party system in the electoral, parliamentary and governmental arenas. In particular, it examines both the causes, with a special focus on the role of the “Great Recession”, and the consequences of party system change: namely, increasing fragmentation, volatility, polarization and government instability.