Madrid's (pronounced with the accent on the first syllable) rich history dates from the early 1800's, taking the village from the discovery of coal, to a mining community, then a ghost town, later a hippy haven, and finally to today's distinctive artists' community. Because of the unique geology of the area, a phenomenon found in only two other mines in the world, hard and soft coal were mined here with shafts as deep as 2500'. The area was booming in it's heyday, supplying coal for the Santa Fe Railroad, local consumers and the US Government. The company town became famous for its Fourth of July parade, lighted Christmas displays and minor league baseball games in the first lighted stadium in the west. When coal use declined the town fell silent. It became a ghost town.

In the early 1970's , artists and craftspeople arrived. They converted old company stores and houses into quality shops and galleries and services. Madrid has a mining museum which features a restored Atchison, Topeka, and Santa Fe Railroad locomotive built in 1900, a functioning blacksmith shop, ancient vehicles, artifacts from daily life in the coal mining era, a slope shaft that exposes a coal seame, and an original tavern. In the summer there is melodrama in a theatre created in the engine house, blues concerts at the ballpark, and walking tours. The Fourth of July parade and Christmas celebrations (the first two weekends in December) have been revived by Madrid's current residents.