As a recent resident of Madrid (8 months!), I still struggle with my Spanish everyday. But it is improving in leaps and bounds. Spain is a wonderful place to learn the language. Here is a good summary from the city’s web site:
Madrid, a cosmopolitan city, a city with an open character and a meeting point of different nationalities and cultures. That’s Madrid, the world capital of the Spanish language, a language that is becoming more and more essential throughout all disciplines. Students from around the world find Madrid an exceptional place to learn a language that is already spoken by more than 400 million people worldwide.
Exhibitions, shows and an endless array of artistic initiatives and leisure activities (shopping, dining out,clubbing) help those who visit Madrid to improve their linguistic skills and increase their knowledge of the Spanish culture. Madrid is the financial capital of Spain, and as such, offers numerous professional training programmes in some of its leading companies. Furthermore, it is home to some of the most renowned institutions aimed at nurturing and promoting the Spanish language, such as the National Library or the Cervantes Institute. The latter bears the name of the author of Don Quixote, who lived in the very city and where he put the finishing touches to his great masterpiece. His birthplace, Alcalá de Henares, is just a few kilometres away, and is today a World Heritage Site. Just one of the many reasons to choose Madrid as your language learning destination.
Literary Madrid
A source of inspiration for many generations of writers, Madrid is not just reflected in it streets, but also in all those books which have made it the protagonist, described it and told its story, as though it were a tale, novel or drama. Spanish is the city’s most valuable heritage, yet it is also fair to say that Madrid is the heritage of its own language. This makes the capital the ideal place to learn Spanish. Below, we list a series of institutions which are an essential part of Spanish culture.
The National Library
Centre in charge of identifying, preserving, conserving and disseminating Spain’s literary heritage.
Café Gijón
Olde worlde café that first opened its doors in 1888 and is the last great literary café, par excellence, in Madrid and a local haunt for celebrities from the worlds of art and literature.
The Cervantes Institute
State-funded Institution, created in 1991 to promote and disseminate the culture of Spain and the teaching of Spanish.
Círculo de Bellas Artes (Circle of Fine Arts)
Founded in 1880, it is a private cultural entity with a non-profit status and ‘Centre and Public Utility for the Protection of Fine Arts’. It is a multidisciplinary centre that promotes activities that embrace everything from the fine arts to literature including science, philosophy, cinema and the scenic arts.
El Ateneo
A private cultural institution founded in 1835 as a scientific-literary cultural association.
Lope de Vega House and Museum
17th Century dwelling purchased by Lope de Vega in 1610 where he lived his latter years.
Sociedad Cervantina
Society devoted to the study of the work of the author of Don Quixote. In fact, it is headquartered on the same lot where Juan de Cuesta had his printing press and where the first part of the novel was published in 1604.
Real Academia Española (Royal Spanish Academy)
“Limpia, fija y da esplendor” (Cleans, fixes and gives splendour). This is the motto of the RAE, whose main task, since 1713, has been to ensure and watch over the evolution and correction of the Castilian language.
The Madrid Tourism Board programme, Discover Madrid, includes an interesting stroll through the Literary Quarter, home to Literati, Muses and Parnassus, where internationally acclaimed writers such as Cervantes, Lope de Vega, Quevedo or Góngora, as well as thespians and other peoples from the world of strolling players, blended together to create a singular atmosphere during the Spanish Golden Age.
The Cervantes Institute
The Cariátides Building (Alcalá, 49) is home to the central offices of the Cervantes Institute. With more than 60 centres located worldwide, it is the public institution that deals with the promotion and teaching of the Spanish language as well as the promotion of the culture of both Spain and other Spanish speaking countries. An aim it has in common with the Professional Association of Spanish Schools of Madrid (AEEEM), and the Spanish Federation of Associations of Spanish Schools for Foreigners (FEDELE) that together guarantee the prestige and integrity of the sector.
If you wish to learn Spanish in Madrid, here is a list of organizations that may be helpful.
I’ve been living the last seven or so months in the Center of the city, mere steps away from Gran Via between Plaza Calloa and Cibeles. It’s a great neighborhood being well-connected to all the mass transport and within walking distance to almost all of the better known tourist areas of Madrid. But it does have its downsides. It is very crowded and as the summer months have worn on, some of the sleazier streets near my home have become rich in the odor of urine and the number prostitutes have grown like wild flowers. It is also not the best neighborhood to have a dog. My globe trotting fellow has gotten into the terrible habit of spending most of his walk time searching for discarded food like some rat weaving back and forth eating anything in his past. It’s pretty disgusting. 
