The European sardine (Sardina pilchardus) is the most abundant and socio-economically important small pelagic fish species in Western Iberia Upwelling Ecosystem. As a result of a long series of low recruitments, sardine biomass off Western Iberia has greatly reduced since the 2000s. Recruitment of small pelagic fish is mainly dependent on environmental factors. In order to identify the key drivers of sardine recruitment, it is essential to understand its temporal and spatial variability. To achieve this goal, a comprehensive suite of atmospheric, oceanographic, and biological variables spanning 1998–2020 (22 years) were extracted from satellite datasets. These were then related to in situ recruitment estimates obtained from yearly spring acoustic surveys carried out along two different hotspots of sardine recruitment of the southern Iberian sardine stock (NW Portugal and Gulf of Cadiz). Sardine recruitment in Atlanto-Iberian waters appears to be driven by distinct combinations of environmental factors, although sea surface temperature was identified as the main driver in both regions. Physical conditions that favour larval feeding and retention, such as shallower mixed layers and onshore transport, were also seen to play a vital role in modulating sardine recruitment. Furthermore, high sardine recruitment in NW Iberia was associated with optimal conditions in the winter (January–February). In contrast, recruitment strength of sardine off the Gulf of Cadiz were associated with the optimal conditions during late autumn and spring. The results from this work provide valuable insights to further understand the dynamics of sardine off Iberia, with potential to contribute to the sustainable management of sardine stocks in Atlanto-Iberian waters, particularly under climate change.