In 711, the Moorish invasion of the Iberian Peninsula was seen by the many in the Jewish population as a liberation, and marked as the beginning of what many have seen as the Golden age of Jewish culture in the Iberian Peninsula (the Islamic Al-Andalus), even if the Jews, as well as the Christians (the Mozarabs of the Visigothic rite), under Muslim rule were considered Dhimmi, and had to pay a special tax.
Rapidly in the 8th century, the Christian kingdoms of the north mountainous areas of the Iberian Peninsula (Kingdom of Asturias) started a long military campaign against the Muslim invaders, the Reconquista. The Jews, since many knew the Arabic language, were used by the Christians as both spies and diplomats on this campaign that took centuries. This granted them some respect, although there were always prejudice.
Until the 15th century, some Jews occupied prominent places in Portuguese political and economical life. For example, Isaac Abrabanel was the treasurer of King Afonso V of Portugal. Many also had an active role in the Portuguese culture, and they kept their reputation of diplomats and merchants. By this time, Lisbon and Évora were home to important Jewish communities.
In 1497, under the pressure of the newly born Spanish State, the Church and also the Christian people, King Manuel I of Portugal decreed that all Jews had to convert to Christianity or leave the country. Hard times followed for the Portuguese Jews, with the massacre of 5000 individuals in Lisbon (1506), the forced deportation to São Tomé and Príncipe (were there is still today a Jewish presence), and the later and even more relevant establishment of the Portuguese Inquisition in 1536.
The Inquisition held its first Auto da fé in Portugal in 1540. Like the Spanish Inquisition, it concentrated its efforts on rooting out converts from other faiths (overwhelmingly Judaism) who did not adhere to the strictures of Catholic orthodoxy; like in Spain, the Portuguese inquisitors mostly targeted the Jewish New Christians, conversos, or marranos. The Portuguese Inquisition expanded its scope of operations from Portugal to the Portuguese Empire, including Brazil, Cape Verde, and Goa. According to Henry Charles Lea between 1540 and 1794 tribunals in Lisbon, Porto, Coimbra and Évora burned 1,175 persons, another 633 were burned in effigy and 29,590 were penanced, but documentation of at least fifteen Autos-da-fé between 1580-1640 - the period of the Iberian Union - disappeared, so the real numbers must be higher. The Portuguese inquisition was extinguished in 1821 by the "General Extraordinary and Constituent Courts of the Portuguese Nation" .
Most Portuguese Jews, thousands, would eventually leave the country to Amsterdam, Thessaloniki, Constantinople (Istanbul), France, Morocco, Brazil, Curaçao and the Antilles. In some of these places their presence can still be witnessed, like the use of the Ladino language by some Jewish communities in Turkey, the Portuguese based dialects of the Antilles, or the multiple Synagogues built by what was to be know as the Spanish and Portuguese Jews (such as the Amsterdam Esnoga).
Many Jews did stay in Portugal, however. A significant number converted to Christianity as a mere formality, practicing their Jewish faith in secret. These Crypto-Jews were known as New Christians, and would always be under the constant surveillance of the Inquisistion - many, if not most of these, would eventually leave the country in the centuries to come and again embrace openly their Jewish faith (such was the case, for example, of the family of Baruch Spinoza).
Some of the most famous descendants of Portuguese Jews who lived outside Portugal are the philosopher Baruch Spinoza (from Portuguese Bento de Espinosa), the classical economist David Ricardo and the Nobel-prize-winning playwright Harold Pinter (from Portuguese Pinto).
Some Jews, very few, like the Belmonte Jews, went for a different and radical solution, practicing their faith in a strict secret isolated community. Known as the Marranos, some have survived until today (basically only the community from Belmonte, plus some more isolated families) by the practice of intermarriage and few cultural contact with the outside world. Only recently have they re-established contact with the international Jewish community and openly practice religion in a public synagogue with a formal Rabbi.
In the 19th century, some affluent families of Sephardi Jewish Portuguese origin, namely from Morocco, returned to Portugal (such as the Ruah and Bensaude). When the first Brazilian Constitution of 1824 allowed freedom of belief, the first Jews to openly emigrate to Brazil were also Sephardi Jewish from Morocco. The first synagogue to be built in Portugal since the 15th century was the Lisbon Synagogue, inaugurated in 1904.
Salazar managed to maintain Portugal's neutrality in the war, but his own personal opinions favored Hitler as far as the combat against Communism was concerned. On November 11, 1939, he issued orders that consuls were not to issue Portuguese visas to "foreigners of indefinite or contested nationality; the stateless; or Jews expelled from their countries of origin". This order was followed only six months later by one stating that "under no circumstances" were visas to be issued without prior case-by-case approval from Lisbon.
Nevertheless Portugal, particularly Lisbon, was one of the last European exit points to the United States, and a huge number of Jewish refugees found shelter in Portugal, many of them (an estimated 30,000 visas to Jews and other persecuted minorities) with the help from the Portuguese consul general in Bordeaux, Aristides de Sousa Mendes (honored by Israel as one of the Righteous Among The Nations), who issued visas against Salazar's orders (and who would eventually be banned from the diplomatic career and reduced to poverty). Thus, the Portuguese government's attitude towards European Jewish refugees was not one of aid in their flight from Nazism, even if it was not, also, one of active cooperation in the Holocaust.
In 1987 the then President Mário Soares, for the first time in the History of Portugal, asked forgiveness to the Jewish communities of Portuguese origin for Portugal's responsibility in the Inquisition and all the past persutions of Jews.
At present there are four synagogues in the country, in Lisbon (Sha'aré Tikvá), Porto, Ponta Delgada in the Azores islands (Porta do Céu - Shaar ha-Shamain) and Belmonte, and several private places were the Jewish community meets. There are a series of kosher products being produced in Portugal, most notably, wine.
It is hard to say how many Jews live in Portugal as of 2006. The Portuguese census estimates a Jewish population of 5000 individuals as of 2001, with a between-census estimate (as of 2006) of 8000. CIA's World Fact Book refers a smaller number of a thousand Jews, mainly central European Holocaust survivors. But the Marranos (Crypto-Jews) and returned Sephardi represent the remainder.
Some Portuguese personalities are known Jews or descendants of Jews, most notably Esther Mucznik (leader of the Israelite Community of Lisbon), the award winning photographer Daniel Blaufuks, screen actress Daniela Ruah, former Lisbon Mayor Nuno Krus Abecassis, and the former President of the Republic Jorge Sampaio, whose grandmother was a Moroccan Jew of Portuguese-Jewish origin (although he does not consider himself Jewish).