Subsidence analysis of Mesozoic sediments in the central part of the Iberian Basin in Central Spain demonstrates that basin evolution was related to three stages of lithospheric stretching, each followed by thermal subsidence. The rifting history was followed by Tertiary inversion. The three extensional phases correlate with rifting stages identified in other parts of the Iberian Basin, on the Betic, Lusitanian and Cantabrian margins of Iberia, and with regional extensional tectonics. The first phase (245-157 Ma), marked by rapid tectonic subsidence in Triassic-Early Jurassic times, yields a lithospheric stretching factor of about 1.10. The second, Oxfordian to earliest Albian (157-112 Ma) in age, is characterised by uplift followed by moderate subsidence. The amount of uplift and subsidence during these phases varies significantly within the basin. The uplift implies subcrustal lithospheric stretching factors ranging from 1.06 to 1.28 assuming a thermal uplift mechanism. The subsequent subsidence corresponds to lithospheric stretching factors in the range from 1.00 to 1.06. The third main phase (95-85 Ma), seen as a Cenomanian-early Senonian acceleration of tectonic subsidence, is modelled with lithospheric stretching factors of about 1.02. The subsidence models are used to reconstruct the paleo-rheological evolution of the area during the Mesozoic, and indicate progressive strengthening of the lithosphere from west to east in the studied area during the Late Jurassic and Cretaceous. For the second phase of rifting and onset of Tertiary basin inversion, strength distributions are not in agreement with localised basin deformation. As an explanation, it is shown that late Variscan faults may have contributed considerably to lithospheric weakening and localisation of extension and inversion.