This article chapter analyses developments in social policy and welfare in Spain during the second half of the 20th century and examines current reforms and policy changes for the near future. In particular, it focuses on the process of devolution of powers to the regions (Comunidades Autónomas). It also examines changes in the areas of unemployment, pensions and the financing of social policies, which are regarded as having particular relevance to Spain’s welfare future. The development of the Spanish welfare system is a story of relatively successful expansion. It shows how sub-national government can play a leaning role in welfare innovation.