The Madrid department of the DAI holds one of the Iberian Peninsula's most significant specialised archaeological libraries. The collection is focussed on the department's aforementioned research topics on Spain, Portugal, Morocco, and the adjacent regions. Its collections furthermore comprise the chief archaeological publications from Germany.

The reference library is accessible to all specialist researchers. Subsequent to its continuous upgrading, the library currently numbers about 90,000 volumes, acquires over 400 journals from 46 countries, and records an annual growth of approx. 1,200 volumes. The Institute presently exchanges publications with about 200 scholarly institutions in Germany and elsewhere. The legacy of Serafín Moralejo (2015) and the donation from Michael Blech (2022) add yet 1,350 more volumes to the book collection on art history and classical archaeology. Through gifts and barter, the library receives many publications which are issued in very small numbers only, or whose access may for various reasons be highly challenging. The collection has consequently become highly valuable.

The holdings of the Madrid Department are searchable via the central online catalogue of the DAI ZENON/iDAI.bibliography.

Exchange with the library of the former DAI branch in Lisbon (1971-1999) continues to persist as a permanent loan to the Direção-Geral do Património Cultural, Palácio Nacional de Ajuda, too located in Lisbon, and moreover furnishes workspace for the DAI research centre.