The squad, led by coach Luis de la Fuente, paraded through the Spanish capital in an open-top bus shortly after 8 p.m. local time, greeted by chanting crowds waving Spanish flags and wearing the national team's shirts.
Fans chanted "You are champions!" and "Long live Spain!" as the bus made its way through the city centre, reaching Cibeles Square much later than planned because of the size of the crowds.
Earlier in the day, King Felipe VI, who had attended Sunday's final in East Rutherford, New Jersey, and congratulated the players on the podium, hosted the squad at the Zarzuela Palace, alongside Queen Letizia and their daughters.
He thanked de la Fuente and his coaching staff, describing Spain's road to the title as an "odyssey" that included a gruelling 1-0 extra-time win over Argentina in the final.
The players also met Prime Minister Pedro Sánchez before heading into the city centre.
Celebrations at Cibeles Square ran past midnight, with the players and coaching staff appearing on stage alongside performances from Spanish musicians including Barei, Alex Martini, Ana Mena, Lola Índigo, Aitana and DJ Nano.
De la Fuente, the oldest coach ever to win a World Cup, thanked the Spanish public for their support and paid tribute to the whole squad and staff.
It is Spain's second World Cup win, following their first in 2010.
Not all the messaging was celebratory – some fans in the crowd held banners criticising FIFA and its president, Gianni Infantino, over refereeing standards during the tournament.
The celebrations were marred by violence and tragedy elsewhere in Spain.
Two people died: a 20-year-old man in Sonseca and a 13-year-old boy killed when part of a fountain collapsed in Ciudad Rodrigo.
By Monday afternoon, 80 people had been injured nationwide, and twelve people had been arrested.
Several fans were attacked by masked groups in the Basque Country and Navarre, in what police suspect were nationalist-motivated assaults, while a 19-year-old was stabbed in Seseña and remains in critical condition.
Argentina's Messi: 'Immense pain'
Lionel Messi said Argentina's 1-0 extra-time defeat had left "immense pain" that would take time to heal, but praised his team for reaching a second consecutive World Cup final.
Writing on social media, he thanked the country's support and congratulated Spain.
The 39-year-old may have played his last World Cup match.
(ał)
Source: PAP, IAR