In Iberia there are 51 officially recognized cattle breeds of which 15 are found in Portugal and 38 in Spain. We present here a comprehensive analysis of the genetic diversity and structure of Iberian cattle. Forty of these breeds were genotyped with 19 highly polymorphic microsatellite markers. Asturiana de los Valles displayed the greatest allelic diversity and Mallorquina the least. Unbiased heterozygosity values ranged from 0.596 to 0.787. The network based on Reynolds distances was star-shaped with few pairs of interrelated breeds and a clear cluster of 4 breeds (Alistana/Arouquesa/Marinhoa/Mirandesa). The analysis of the genetic structure of Iberian cattle indicated that the most probable number of population clusters included in the study would be 36. Distance results were supported by the STRUCTURE software indicating a relatively recent origin or possible crossbreeding or both between pairs or small groups of breeds. Five clusters included 2 different breeds (Betizu/Pirenaica, Morucha/Avileña, Parda de Montaña/Bruna de los Pirineos, Barrosã/Cachena, and Toro de Lidia/Brava de Lide), 3 breeds (Berrenda en Negro, Negra Andaluza, and Mertolenga) were divided in 2 independent clusters each, and 2 breeds were considered admixed (Asturiana de los Valles and Berrenda en Colorado). Individual assignation to breeds was not possible in the 2 admixed breeds and the pair Parda de Montaña/Bruna de los Pirineos. The relationship between Iberian cattle reflects their geographical origin rather than their morphotypes. Exceptions to this geographic clustering are most probably a consequence of crossbreeding with foreign breeds. The relative genetic isolation within their geographical origin, the consequent genetic drift, the adaptation to specific environment and production systems, and the influence of African and European cattle have contributed to the current genetic status of Iberian cattle, which are grouped according to their geographical origin. The greater degree of admixture observed in some breeds should be taken into account before using molecular markers for genetic assignment of individuals to breeds.