It was opened in Francoist Spain in 1944 to house political prisoners after the Spanish Civil War.

Carabanchel Prison was constructed between 1940 and 1944 by the Spanish State government of caudillo Francisco Franco using the panopticon model.

Notable inmates included Marcelino Camacho (leader of the Comisiones Obreras) and the rest of its top-ranking members as a result of the Process 1001, Julián Ariza (member of the same union), Nicolás Redondo (leader of the Workers' General Union), Eduardo Saborido, Simón Sánchez Montero (Communist Party leader who served 25 years in prison),[1] José María Ruiz Gallardón (monarchist opponent of Franco and father of the former Minister of Justice Alberto Ruiz Gallardón),[2] Nicolás Sartorius,[3] Ramón Tamames,[4] Enrique Múgica and Enrique Curiel (communist activists), Miguel Boyer (Spanish Socialist Workers' Party activist and later minister),[5] Fernando Sánchez-Dragó,[6] Miguel Gila,[7] Fernando Savater,[8] Fernando Arrabal,[9] Agustín Rueda,[10] CNT member Luís Andrés Edo and would-be Franco assassins Stuart Christie and Fernando Carballo Blanco.

In the mid-1970s, Carabanchel briefly housed transgender activist Silvia Reyes for being a "transvestite" (the then-current term for a trans woman).

[11] Colombian cocaine kingpins Jorge Luis Ochoa Vásquez and Gilberto Rodríguez Orejuela were also imprisoned in Carabanchel in the mid-1980s.