We describe a new pollen and Sea Surface Temperature (SST) record with subcentennial to centennial resolution from a well-dated sediment core (D13882) obtained from the Atlantic margin of the southwest Iberian Peninsula. The core provides new insights into the dynamics of five ecological pollen-based groups (temperate forests, Mediterranean forests, pinewoods, heathlands and steppe) since the Late Pleistocene (last 13260 cal yr BP). The record shows that the Early Holocene was marked by an increase of temperate and Mediterranean taxa, accompanied by a reduction of steppic plants, reflecting warm and relatively moist conditions when compared with the previous Younger Dryas episode. The timing of this Temperate and Mediterranean Forest (TMF) maximum which reflects optimum conditions of temperature and precipitation is regionally specific, as detected through a comparison of three marine cores across the Iberian Peninsula. Maximum TMF development occurs between 9760 and 7360 cal yr BP in D13882 whereas at a site to the northwest (MD03-2697), the maximum occurs some centuries earlier, and at a southeast site (MD95-2043), the maximum is evident later. The duration of the forest maximum is also progressively longer from northwest to southwest to southeast. A transition from forested ecosystems to heathland over western Iberia characterises the Middle Holocene, starting from around 7360 cal yr BP in D13882, suggesting reduced seasonality and a more Atlantic climate character with moisture evenly available through the year. This contrasts with the aridity recorded in southeast Iberian sites and reflects a stable precipitation gradient between the wetter west and drier east of the Iberian Peninsula. Against this backdrop, pinewoods had a continuous presence, albeit with a trend of steady decline through the Holocene. The time-transgressive pattern in the TMF maximum is best explained by a less favourable moisture balance in the drier southeast sector, which was particularly important during the Early Holocene. Despite the relatively short duration of the Holocene interglacial (one half precession cycle), our observations support a key role for orbital forcing in the temporal expression of major vegetation groups, specifically the decline in summer insolation and the precession-related passage of perihelion season from summer to winter.