Gibraltar, a British Overseas Territory, located at the southern tip of the Iberian Peninsula, is the subject of a territorial claim by Spain. It was captured in 1704 during the War of the Spanish Succession (1701–1714). The Spanish Crown formally ceded the territory in perpetuity to the British Crown in 1713, under Article X of the Treaty of Utrecht. Spain later attempted to recapture the territory during the thirteenth siege (1727) and the Great Siege (1779–1783). British sovereignty over Gibraltar was confirmed in later treaties signed in Seville (1729) and the Treaty of Paris (1783).

Reclamation of the territory became government policy under the dictatorial regime of Francisco Franco, and this policy has remained in place under successive governments following the Spanish transition to democracy. The Gibraltarians themselves reject any such claim and no political party or pressure group in Gibraltar supports union with Spain. In a referendum in 2002 the people of Gibraltar rejected a joint sovereignty proposal on which Spain and the United Kingdom were said to have reached "broad agreement". The British Government now refuses to discuss sovereignty without the consent of the Gibraltarians, whereas Spain insists on a bilateral agreement with the UK over sovereignty.

In 2000, a political declaration of unity was signed by the members of the Gibraltar Parliament; according to the Gibraltar government, "In essence the declaration stated that the people of Gibraltar will never compromise, give up or trade their sovereignty or their right to self-determination; that Gibraltar wants good, neighbourly, European relations with Spain; and that Gibraltar belongs to the people of Gibraltar and is neither Spain's to claim nor Britain's to give away."

The United Nations understanding of the positions of each party is set out in their 2016 report. The UN currently lists Gibraltar as a Non-Self-Governing Territory.

Gibraltar was captured in 1704 by a force led by Admiral Sir George Rooke representing the Grand Alliance on behalf of the Archduke Charles, pretender to the Spanish Throne. After the battle, almost all of the inhabitants decided to leave. Spanish attempts to regain the territory in the Twelfth siege of Gibraltar failed, and it was eventually ceded to the Kingdom of Great Britain by Spain in the 1713 Treaty of Utrecht as part of the settlement of the War of the Spanish Succession. In that treaty, Spain ceded to Great Britain "the full and entire propriety of the town and castle of Gibraltar, together with the port, fortifications, and forts thereunto belonging ... for ever, without any exception or impediment whatsoever."

Should the British Crown ever wish to relinquish Gibraltar, a reversion clause holds that the territory would first be offered to Spain: "And in case it shall hereafter seem meet to the Crown of Great Britain to grant, sell or by any means to alienate therefrom the propriety of the said town of Gibraltar, it is hereby agreed and concluded that the preference of having the sale shall always be given to the Crown of Spain before any others."

Furthermore, the Treaty stipulates "that the above-named propriety be yielded to Great Britain without any territorial jurisdiction and without any open communication by land with the country round about" (although there is dispute over whether this disclaims territorial jurisdiction over Gibraltar, or over the "country round about") and that no overland trade between Gibraltar and Spain is to take place, except for emergency provisions in the case that Gibraltar is unable to be resupplied by sea. The British Government and the Government of Gibraltar have argued that the membership of both Gibraltar and Spain in the European Union (EU) — Gibraltar was included as a Special member state territory when the United Kingdom joined the EU in 1973; Spain joined the EU in 1986 – superseded such restrictions as the EU is committed to free movement of goods and services. The effect of Brexit on Gibraltar is unclear.

The United Nations regards Gibraltar as a Non-Self-Governing Territory administered by the United Kingdom of Great Britain and Northern Ireland. Its report of February 2016 sets out the differing views of the various parties relating to Gibraltar.