The formation of what would become 250. Infanterie-Division (also well known as the División Azul, the Blue Division) was first suggested by Serrano Súñer, foreign minister and the most trusted advisor of the Spanish dictator Francisco Franco, following the German invasion of the USSR in 1941 as an alternative to a declaration of war.
Recruitment of volunteers began on 28 June and a large number of members of the fascist Falange (the full name of the party was Falange Española Tradicionalista y de las J.O.N.S (FET)) volunteered, including six members of the FET National Council and several provisional governors. The Spanish Army however insisted on keeping control of the unit rather than have it run by the FET and in the end all the officers came from the regular army as well as about 70% of the volunteers, most of them veterans of the Spanish Civil War.
The commander of the unit would be Agustín Muñoz Grandes, former secretary general of the FET and one of the few Falangist generals. The unit was technically subordinate to the Spanish Ministry of the Army but served under German command.

The first volunteers left for Germany on 17 July for further training and remained in Grafenwöhr for training until being sent to the Eastern Front in August 1941.
They saw their first action 12 October 1941 at Lake Ilmen and remained on the front near Leningrad until it was disbanded in October 1943, most famous and costly battle being Krasny Bor during Operation Polar Star.

Franco relieved Muñoz Grandes of his command in May 1942 due to the latter’s support of a more radical and fascist government in Spain, but Adolf Hitler insisted that he would remain for at least a few more months which also happened.
In a meeting with Hitler on 12 July Muñoz Grandes is said to have stated his intention to return to Spain and become president of the government with Franco as little more than a figurehead, turning Spain into a true fascist nation, this was supposed to take place after the next major Axis victory in the east, most likely after the fall of Leningrad, were some sources say that Hitler had planned an important role for the Spanish general.

Muñoz Grandes was finally sent back to Spain in December 1942 on the order of Franco in return for allowing a visit by a delegation to Berlin led by FET secretary general José Luis de Arrese. When Muñoz Grandes arrived in Spain on 17 December he was met by the entire government excluding only Franco himself and he was awarded the Palma de Plata, the highest award of the party, it was the first such award since the death of the founder of the party José Antonio Primo de Rivera during the Spanish Civil War. He was also promoted to the rank of Lieutenant General, being outranked only by Franco, but he did not receive any position that gave him command over any troops. After the war he would however rise to higher positions, including Minister of the Army (15 July 1951) and finally vice President of the government (10 July 1962).

In October 1943 Spain changed its status in the war from nonbelligerence to neutrality, disbanding the Blue Divison (which received its name from the blue shirts worn by the FET). Some volunteers, amounting to three battalions, were allowed to remain on the Eastern front as the Spanische Legion which was finally disbanded on 15 March 1944. Those who wanted to continue fighting with the Germans later served in Spanische-Freiwilligen-Kompanie der SS 101 and Spanische-Freiwilligen-Kompanie der SS 102, according to some sources the Germans managed to recruit an additional 250 Spaniards after the Blue Division was disbanded until the Allied landings in Normandy.

A total of about 47.000 Spanish officers and men served in the east, suffering 22.000 casualties including about 4.500 dead.

Adolf Hitler commented on the Spanish volunteers in his table talks:

Extraordinarily brave, tough against privations, but wildly undisciplined. What is lamentable with them is the difference in treatment between officers and men. The Spanish officers live in clover, and the men are reduced to the most meager pittance. (1)

Commanders

Generalmajor Agustín Muñoz Grandes (20 Jul 1941-13 Dec 1942)
Generalleutnant Emilio Esteban-Infantes Martín (13 Dec 1942-20 Oct 1943)

Operations Officers (Ia)

Oberst José María Troncoso Sagredo (Jul 1941-Aug 1941)
Oberstleutnant Luis Zanón Aldalur (Aug 1941-May 1942)
Oberst Roberto Gómez de Salazar (May 1942-Jan 1943)
Major Manuel García Andino (Jan 1943-10 Apr 1943)
Oberstleutnant José Diaz de Villegas (10 Apr 1943-14 Jun 1943)
Oberst Antonio García Navarro (14 Jun 1943-Nov 1943)
Oberstleutnant José Diaz de Villegas (Nov 1943-Dec 1943)

Leiter des Deutschen Verbindungsstabes zur 250. Inf.Div.

Major von Oertzen (Jul 1941-13 Oct 1941)
Major Günther Collatz (13 Oct 1941-15 Dec 1942)
Oberst Wilhelm Knüppel (15 Dec 1942-Dec 1943)

Area of operations

Rear Area of HGr Nord (Narwa, Luga) (July 1941 - Oct 1943)

Holders of high awards

Holders of the German Cross in Gold (2)
- Emilio Esteban-Infantes Martín , 09.04.1943, Generalmajor, Kdr. 250. Span.Div.
- Knüppel, Wilhelm, 15.12.1943, Oberst i.G., Leiter des Dt.Verb.Stb. d. 250.(Sp.) Frw.Div.
Holders of the Knight's Cross (3)
- Agustín Muñoz Grandes, 12.03.1942 Generalleutnant Kdr 250. Inf.Div (span.)
- Agustín Muñoz Grandes, 13.12.1942 Generalleutnant Kdr 250. Inf.Div (span.), Oakleaves
- Emilio Esteban-Infantes Martín , 03.10.1943 Generalleutnant Kdr 250. Inf.Div (span.)

Nicknames

Blaue Division / División Azul (Blue Division)
Spanische Division (Spanish Division)

Order of battle

Infanterie-Regiment 262 (span.)
Infanterie-Regiment 263 (span.)
Infanterie-Regiment 269 (span.)
Artillerie-Regiment 250 (span.)
Panzerjäger-Abteilung 250 (span.)
Aufklärungs-Abteilung 250 (span.)
Pionier-Bataillon 250 (span.)
Infanterie-Divisions-Nachschubführer 250 (span.)
Divisionseinheiten 250

Other militaria

A special medal was awarded to those who served in this division: the Blue Division Medal.

(Courtesy of Rusfront)

The Spanish government issued a separete award to those Spaniards who fought on the Eastern front.

(Courtesy of Rusfront)

Guión of the II Battalion of the "Pimentel" Regiment

(Courtesy of Flags of the World)

Propaganda & Culture

Lyrics to the divisional song Himno de la División Azul.

Con mi canción
la gloria va
por los caminos del adiós,
que en Rusia están
los camaradas de mi División.

Cielo azul
a la estepa desde España llevaré,
se fundirá la nieve
al avanzar, mi capitán.

Vuelvan por mi
el martillo al taller,
la hoz al trigal.
Brillen al sol
las flechas en el haz
para ti,
que mi vuelta alborozada has de esperar
entre el clamor
del clarín inmortal.

En la distancia queda
gozo del hogar
con aires de campanas,
vuelo de la paz.

Resuenan los tambores;
Europa rompe albores,
aligerando nubes
con nuestro caminar.

Con humo de combate
yo retornaré,
con cantos y paisajes
que de allí traeré.

Avanzando voy;
para un mundo sombrío
llevamos el sol;
avanzando voy
para un cielo vacío
llevamos a Dios.

In fiction

The 2006 board game "Panzer Grenadier: Blue Division" by Michael Bennighof covers the actions of the division.

The 1995 board game "Black Wednesday" by Dean Essig and Dave Friedrichs covers the actions of the division during the battle of Krasni Bor in February 1943.

Spanish volunteers, note the Spanish awards

(Courtesy of Jörgen)

Spanish volunteers reading the Marca

(Courtesy of Ignasi Masip)

Chaplain with soliders of División Azul, note the Spanish rank badge above the breast pocket

(Courtesy of Ignasi Masip)

Spanish volunteers with a Falangist flag

(Courtesy of Jörgen)

Footnotes

1. "Hitler's Table Talk, 1941-1944: His Private Conversations" (Enigma Books, 2008) edited by H.R. Trevor-Roper, page 138.

Sources used

Christopher Ailsby - Hitler's Renegades: Foreign nationals in the service of the Third Reich
Fernando J. Carrera Buil & Augusto Ferrer-Dalmau Nieto - Batallón Román: Historia fotográfica del II/269 Regimiento de la División Azul
Carlos Caballero Jurado - Blue Division Soldier 1941-1945: Spanish volunteer on the Eastern Front
Stanley G. Payne - Fascism in Spain 1923-1977
John Scurr - Germany's Spanish Volunteers 1941-45
George Tessin - Verbände und Truppen der Deutschen Wehrmacht 1939-1945
H.R. Trevor-Roper (ed) - Hitler's Table Talk, 1941-1944: His Private Conversations

Reference material on this unit

Antonio de Andrés y Andrés - Artillería en la División Azul
Eduardo Barrachina Juan - La Batalla del Lago Ilmen: División Azul
Carlos Caballero & Rafael Ibañez - Escritores en las trincheras: La División Azul en sus libros, publicaciones periódicas y filmografía (1941-1988)
Fernando J. Carrera Buil & Augusto Ferrer-Dalmau Nieto - Batallón Román: Historia fotográfica del II/269 Regimiento de la División Azul
Juan Chicharro Lamamié - Diario de un antitanquista en la División Azul
Jesus Esteban - The Military Intervention Corps of the Spanish Blue Division in the German Wehrmacht 1941-1944: Organization, uniforms, insignia, documents
Jesús Dolado Esteban (etc) - Revista de comisario: el cuerpo de Intervención Militar de la División Azul 1941-1944
Arturo Espinosa Poveda - Artillero 2º en la gloriosa División Azul
Arturo Espinosa Poveda - ¡Teníamos razón! Cuando luchamos contra el comunismo Soviético
Emilio Esteban-Infantes Martín - Blaue Division: Spaniens freiwillige an der Ostfront
Miguel Ezquerra - Berlin a vida o muerte
Ramiro García de Ledesma - Encrucijada en la nieve: Un servicio de inteligencia desde la División Azul
José García Hispán -  La Guardia Civil en la División Azul
César Ibáñez Cagna - Banderas españolas contra el comunismo
Carlos Caballero Jurado - Blue Division Soldier 1941-1945: Spanish volunteer on the Eastern Front
Gerald R. Kleinfeld & Lewis A. Tambs - Hitler's Spanish Legion: The Blue Division in Russia
Vicente Linares - Más que unas memorias: Hasta Leningrado con la División Azul
Torcuato Luca de Tena - Embajador en el infierno: Memorias del Capitán de la División Azul Teodoro Palacios
Xavier Moreno Julia - La División Azul: Sangre española en Rusia 1941-45
Juan José Negreira - Voluntarios baleares en la División Azul y Legión Azul (1941-1944)
Ricardo Recio - El servicio de intendencia de la División Azul
José Mª Sánchez Diana - Cabeza de Puente: Diario de un soldado de Hitler
John Scurr & Richard Hook - Germany's Spanish Volunteers 1941-45
Luis E. Togores - Muñoz Grandes: Héroe de Marruecos, general de la División Azul
Manuel Vázquez Enciso - Historia postal de la División Azul
Enrique de la Vega - Arde la Nieve: Un relato histórico sobre la División Azul
Enrique de la Vega Viguera - Rusia no es culpable: Historia de la División Azul
José Viladot Fargas - El espíritu de la División Azul: Possad
Díaz de Villegas - La División Azul en línea