The Atalaya Castle (Spanish: Castillo de la Atalaya or Castillo de Villena, English: Castle of the Watch) is a castle in Villena, province of Alicante, southern Spain. Located over a spur of the Sierra de la Villa, in the north-western part of the province of Alicante, it commands the former frontier between Castile and Kingdom of Aragon.
The castle was built in an unknown age, although not after the 12th century, since Arab sources mention it in 1172. It has been speculated that the fortification could have been built over a Roman castrum or villa, but no proofs of this have been found.
The castle was an important stronghold on the northern frontier of the Islamic emirate of Iberia, and resisted to three different sieges laid by James I of Aragon. He was finally able to conquer it in 1240, although the castle was handed over to the Kingdom of Castile after the Treaty of Almizra of 1244. It was first given to the Order of Calatrava, but was soon acquired by Infante Manuel when he became lord of Villena. Here resided his son, writer Juan Manuel, Prince of Villena, who was succeeded as proprietor by Alfonso of Aragon and Foix, the first Marquis of Villena.
In 1476 the citizens of Villena, encouraged by the Catholic Monarchs, rebelled against the marquisses and killed numerous Jews and conversos who had taken refuge in the castle. After this event, the castle stopped to be residence of the marquisses, and, together with the city, became a royal possession.