A general election was held in Spain on 22 June 1986 to elect the members of the 3rd Cortes Generales under the Spanish Constitution of 1978. All 350 seats in the Congress of Deputies were up for election, as well as 208 of 254 seats in the Senate. It was held concurrently with a regional election in Andalusia.

The election was held after the referendum on Spanish membership in NATO in March 1986 had resulted in a surprising win for the 'In' camp headed by Prime Minister Felipe González. Reinforced from the referendum result, the Spanish Socialist Workers' Party (PSOE) sought to take advantage of the favorable political situation. The election resulted in the PSOE winning a second consecutive—albeit diminished—majority with 184 out of 350 seats. Its immediate competitor, Manuel Fraga's People's Coalition, an electoral alliance formed by People's Alliance (AP), the People's Democratic Party (PDP) and the Liberal Party (PL), remained stagnant with a similar result to the one obtained in 1982 by the AP–PDP alliance. The disappointing election result caused the Coalition to break apart shortly afterwards.

Former PM Adolfo Suárez's Democratic and Social Centre (CDS) came out in third place with nearly 1.9 million votes, 9.2% of the share and 19 seats. The Communist Party of Spain (PCE) contested the election within the newborn left-wing United Left (IU) alliance, slightly improving on the PCE's result in 1982 with 4.6% and 7 seats and holding its own against the Communists' Unity Board (MUC), Santiago Carrillo's split party founded after him being expelled from the PCE, which won no seats.

Two future prime ministers (José Luis Rodríguez Zapatero and Mariano Rajoy) were first elected as deputies at this election.

Shortly after assuming office on 2 December 1982, Prime Minister Felipe González had to face a worsening economic situation, with high inflation, soaring unemployment and a public deficit at 6%. Among the new PSOE government's first economic measures were the nationalization of the Rumasa holding due to its financial situation, alleged fraudulent practices and continuous evasion from the inspection activity conducted by the Bank of Spain, the reduction of working time to 40-hour week, the establishment of a minimum legal annual leave of 30 days and a lunch break of 15 minutes.

This period saw major reforms being implemented in order to achieve economic recovery as well as equalization of Spain with the remainder of Europe, including an unpopular economic stabilization plan involving a process of industrial restructuring (which led to the closure of many obsolete industries) and a reform of the pension system which lengthened the period used to calculate full pension benefits from 10 to 15 years and adopted a new system for pension revaluation. This economic policy received widespread criticism from trade unions—including the historically PSOE-aligned UGT—leading to strikes and demonstrations opposing the government's economic policy. A new labor reform was approved, which included fiscal incentives to investment, added protection for unemployed and the easing of temporality through the implementation of fixed-term contracts. González's first term also saw the establishment of the Spanish National Health System and universal health care in Spain, and decriminalization of abortion in three cases: therapeutic in cases of serious risk to the physical or mental health of the pregnant woman, during the first 12 weeks; criminological in cases of woman rape, during the first 22 weeks; and eugenic in cases of fetus malformations, at any time during pregnancy. Free and compulsory education was established until the age of 16.

Internally, these years were marked by a harsh hostile campaign from terrorist group ETA, with around one hundred dead throughout the 1982–1986 period as a result of its activity, which was countered with a similarly harsh government response. The PSOE government also had to deal with the issue of military insurrectionism, with a profound reorganization of the Spanish Armed Forces by promoting an increase of civil authority over the military, with the final aim of professionalizing the Armed Forces and end the threat of military coup attempts. Felipe González also came briefly involved in the 1984 German Flick affair, when SPD MP Peter Struck said in the German press that another MP from his party, Hans-Jürgen Wischnewski, had given one million marks from the corruption plot to González himself. The Spanish prime minister countered this with a remarkable statement at the time: "I have not received a single mark, a single penny, a single peseta, neither from Flick nor from Flock", and was later acquitted from the scandal by the inquiry commission in Congress.

Internationally, the PSOE government was successful in culminating negotiations for the Spanish entry into the European Economic Community (EEC), effective from 1 January 1986. The issue of NATO membership was more controversial, as the PSOE had campaigned for the holding of a referendum on the issue after Leopoldo Calvo-Sotelo's move to enter the alliance in May 1982. However, once in power Felipe González evolved to support NATO. According to Santos Juliá, the main factors that influenced the PSOE government's change of attitude were "pressure from the United States and several European countries; the connection between staying in NATO and Spain–EEC negotiations and the growing favorable stance of the Spanish Defence Ministry to attain closer ties with the Alliance". By 1985, as Spain had signed the Act of Accession to the EEC, preparations for the referendum on NATO membership started, being eventually held on 12 March 1986. NATO permanence option won the vote by a surprising 53.1% to 40.3%, and the PSOE came out reinforced.