Informed by the theories of Henri Lefebvre regarding the production of space and the theories of scale found in current scholarship in Cultural Geography, my methodology analyzes both dramatic texts and theater spaces to investigate how cultural production and capital converge in the “spectacle” of urban space. While employing this term “spectacle” to describe how dramatic texts, theater productions, and modern architecture transform the urban landscape into a metaphoric theater space for the production of local, national, and global identities, this project examines the relationship between theater and urban change in Lavapiés, an iconic, multicultural, and oftenunderserved neighborhood located in the Embajadores district of Madrid, Spain. Against the historical backdrop of the neighborhood’s long and important relationship with theater and theater spaces from the seventeenth century onwards, I analyze a range of urban spectacles taking place in Madrid between 1997 and 2006. This analysis includes close readings of contemporary plays that represent the urban space of Lavapiés and Madrid, an analysis of the architecture of power articulated in the the municipal government’s Plan General de Ordenación Urbana de Madrid 1997 [Plan for Urban Development for Madrid 1997] and the recently constructed Teatro Valle-Inclán Centro Dramático Nacional [National Drama Center]. Finally, I look at the cultural activities of the squatters (okupas) of the Laboratorio 03 who between 2002 and 2003 transformed an abandoned warehouse into a space for art, theater, and cyber resistance that sought to shatter the illusion of capitalist spectacle projected by the gleaming steel and glass of the new condominiums and cultural institutions represented by the aforementioned Teatro Valle-Inclán. Overall, this project looks to this range of traditional and nontraditional texts to illustrate how Madrid’s historical dynamic between urban space, power, and theater continues to be manifested in the contemporary spectacle of Lavapiés.