Spain's captivating and energetic capital city, Madrid, hosts the well-attended Madrid Gay Pride (aka Orgullo LGTB) in late June, just after the hugely attended Barcelona Gay Pride), although many events leading up to Pride take place earlier, kicking off a week ahead (the full dates are June 29 to July 3, 2016). Most of these parties and celebrations are held in the city's Gay Village, the Chueca District, which is a short walk from the city center. The major day of Madrid Gay Pride is Saturday, July 2, 2016 - this is when the city's Gay Pride Parade occurs, followed by the Madrid Gay Pride Festival, which takes place on the city's central Plaza de Colon, from 6:30 pm into the evening.
Note that Madrid is just one year away from hosting one of the biggest LGBT events around, World Pride 2017 - the dates are June 23 through July 2.
Keep in mind that out near Barcelona on the Mediterranean, Sitges Gay Pride takes place a couple of weeks prior to Madrid's event, in mid- to late June.
Madrid Gay Resources
Additionally, plenty of gay-popular restaurants, hotels, and shops cater heavily to LGBT visitors during this time. Check gay resources, such as GoMadrid.com's Gay Site, the helpful site GayMadrid.com, and Patroc.com's online guide to Gay Madrid, for details about the local scene. Also take a look at the excellent GLBT site produced by the city's official tourism organization, Tourism Madrid.