King Felipe said in the traditional address to both Houses of Parliament that Britain and Spain have a long-shared history and have often "stood shoulder to shoulder" as friends, partners and allies in the best interests of both countries.
Queen Elizabeth and the Duke of Edinburgh along with Prince Charles and Duchess Camilla welcomed Spain's King Felipe, 49, and Queen Letizia, 44, to Buckingham Palace for the royal couple's first-ever state visit to England.
They "form a sound foundation for our relations", he added.
The king highlighted the two countries' important trading arrangements, adding that Britain is "the second largest investor in our country".
The Queen chatted to Letizia as they watched the men inspect the troops.
The Captain of the Guard of Honour Major Charlie Gair, presented his Guard of Honour to King Felipe VI in Spanish while Major General Ben Bathurst, Major General Commanding the Household Division, commanded the grand parade.
The last incoming state visit by a Spanish king - Felipe's father, King Juan Carlos - was in 1986. The long-line collarless lemon blazer featured a minimal style and textured fabric, and complimented the royal's slimline physique.
The pair married and Princess Victoria Eugenie became Queen Ena of Spain, making King Felipe a descendant of Queen Victoria.
Flags of Commonwealth nations were displayed at Horse Guards Parade.
Though with his retirement looming, this may unfortunately be the last time Prince Philip performs the ritual.
We will find out just after 4pm when the King and his wife, Queen Letizia, travel from Buckingham Palace to the Palace of Westminster.
It was a chance for Britain to show off how well it can do "pomp".
Tonight, many members of the British Royal Family are expected to attend The State Banquet including the Duke and Duchess of Cambridge and Prince Harry.
The backdrop to the visit is strained relations between Spain and the United Kingdom over the sovereignty of Gibraltar, which have come to the fore because of Brexit.