In 1969, Franco designated Prince Juan Carlos of Bourbon, the grandson of King Alfonso XIII who was overthrown in 1931, as his official successor. Juan Carlos was expected to continue Franco's policies and maintain the authoritarian regime after Franco's death. However, the prince had other plans, having been influenced by his time spent abroad and his discussions with European leaders and intellectuals.

Franco died on November 20, 1975, and two days later, Juan Carlos was proclaimed King of Spain. In his first speech as king, Juan Carlos expressed his commitment to working towards national unity, democracy, and development in Spain. Though some skeptics doubted his intentions, he quickly began to implement reforms and dismantle the structures of Franco's regime.

Juan Carlos appointed Adolfo Suárez, a young and relatively unknown politician, as prime minister in 1976. Under Suárez's leadership, the Spanish government introduced a series of political reforms, paving the way for a democratic system. The Spanish Parliament, known as the Cortes, approved a new law for political reform in November 1976, which was later endorsed by a national referendum in December.

In 1977, Spain held its first free parliamentary elections since 1936, marking a significant milestone in the country's transition to democracy. The Spanish Socialist Workers' Party (PSOE), the Communist Party of Spain (PCE), and other previously banned political parties were allowed to participate, and Adolfo Suárez's Union of the Democratic Centre (UCD) emerged as the winner.

The Spanish Constitution of 1978 was another significant development, establishing a parliamentary monarchy and guaranteeing various rights and freedoms for Spanish citizens. It was approved by the Spanish Parliament and ratified through a national referendum, further consolidating the democratic transition.

King Juan Carlos played a crucial role in this period, using his influence to promote democratic reforms and garner support from various political factions. His efforts were tested in 1981 when a group of military officers attempted a coup d'état to restore an authoritarian regime. Juan Carlos, dressed in his capacity as the commander-in-chief of the armed forces, addressed the nation on television, firmly condemning the coup attempt and expressing his support for the democratic government. His intervention was crucial in quelling the coup and preserving Spain's democracy.