The mechanisms underlying the occurrence of temperature extremes in Iberia are analysed considering a Lagrangian perspective of the atmospheric flow, using 6-hourly ERA-Interim reanalysis data for the years 1979–2012. Daily 2-m minimum temperatures below the 1st percentile and 2-m maximum temperatures above the 99th percentile at each grid point over Iberia are selected separately for winter and summer. Four categories of extremes are analysed using 10-d backward trajectories initialized at the extreme temperature grid points close to the surface: winter cold (WCE) and warm extremes (WWE), and summer cold (SCE) and warm extremes (SWE). Air masses leading to temperature extremes are first transported from the North Atlantic towards Europe for all categories. While there is a clear relation to large-scale circulation patterns in winter, the Iberian thermal low is important in summer. Along the trajectories, air mass characteristics are significantly modified through adiabatic warming (air parcel descent), upper-air radiative cooling and near-surface warming (surface heat fluxes and radiation). High residence times over continental areas, such as over northern-central Europe for WCE and, to a lesser extent, over Iberia for SWE, significantly enhance these air mass modifications. Near-surface diabatic warming is particularly striking for SWE. WCE and SWE are responsible for the most extreme conditions in a given year. For WWE and SCE, strong temperature advection associated with important meridional air mass transports are the main driving mechanisms, accompanied by comparatively minor changes in the air mass properties. These results permit a better understanding of mechanisms leading to temperature extremes in Iberia.