As exemplified by the Hungarian Rhapsodies, Liszt collected indigenous (or seemingly indigenous) music, such as folk songs, and composed based on them. The Spanish Rhapsody can certainly be considered a work of this kind. Other works based on Spanish folk songs include the 1836Rondeau fantastique sur un thème espagnol, "El Contrabandista" S.252 and the 1845Grand Concert Fantasy on Spanish Songs S.253, but the Spanish Rhapsody was composed much later, in 1858. It should be noted that the Grand Concert Fantasy on Spanish Songs S.253 uses the same melodic material as the Spanish Rhapsody, and the present work is sometimes considered an adaptation of the former.

It is generally believed to have been compiled in Rome in 1863, which was previously considered its composition year. However, the Liszt works catalog in the second edition of the German music encyclopedia MGG has corrected the composition year to 1858.

The content of the work, similar to the Hungarian Rhapsodies, is structured by the contrast between slow and fast tempo sections. Following a cadenza-like introduction, the first half is based on the "Folia," a slow-tempo dance originating from the Iberian Peninsula. The "Folia" has a performance tradition of variations based on a standardized bass and harmonic progression in a minor key, and Liszt composed in variation form, adhering to this tradition. The latter part, the fast-tempo "Jota," an enthusiastic dance originating from the Aragon region of Spain, is reminiscent of the "Friska" in the Hungarian Rhapsodies. Even after creating a dramatic climax with the "Jota," Liszt does not rest his pen; the first half's Folia is brilliantly recapitulated in a major key, bringing the piece to a close. The slow Folia theme in a minor key was thus "transformed" by Liszt into a majestic closing theme for the entire work.