This paper identifies the main territorial impacts of EU Cohesion Policy in the Iberian Peninsula, in the first four programming periods (1989-2013). Moreover, it discusses the relevance of the strategy associated with this Policy, the role of EU funds in promoting a more cohesive territory, and suggests alternative paths to improving its effectiveness and efficiency. In short, our analysis concludes that, despite high levels of inefficiency, and lack of an adequate medium-longer term strategic vision to make the most out of the Iberian Peninsula’s territorial capital, the large volumes of funding were crucial in modernizing many territorial infrastructures, and in improving the human capital of both Iberian countries. However, in overall terms, the territorial cohesion goal was not achieved during the last couple of decades, at the national level. Worse still, the continuous negative commercial trade balance, which has been characterising both Iberian economies for a long time, associated with low levels of productivity increase, is illustrative of the existing and persistent structural territorial development constraints in both Iberian Countries. Hence, these need to be tackled in a more effective manner during the post-2020 phases of EU Cohesion Policy, in order to put the Iberian Peninsula in track with the most developed territories in Europe.