This is a tiny spot, literally, on the street, right in front of “Casa de Correos” (Post Office House) the building where the local government’s office is located. The location of this marker has been indicated exactly by satellite because it is the center of Spain. If you look closely at a map, and point to the middle of the country, this is where you are pointing at and a plaque is there to signalize it.
It is also the point from which all distances in the country are measured. For example, if the distance between Madrid and Barcelona is, approximately, 600 km note that the driving distance started at km 0.
“Casa de Correos” is where the New Year’s clock and bells are located, meaning that it’s the center of the famous New Year’s celebration in Madrid. But in spite of the touristic interest in the area, very few people (locals or visitors) are aware of km 0, and even think it is a urban legend.
My favorite urban legend of all is the fact that you have to step on the plaque in order to come back to Madrid. I learned about it early on, took it very seriously and every visitor I have taken to this spot has actually been back. So just in case, be camera ready and step on it.