Two first half goals by Deportivo La Coruna forward David Mella and Real Madrid's Iker Gil gave the hosts the victory in the first game of the four-team tournament.
It is Ireland's first defeat of the season and they were unlucky not to find the net - creating several great chances throughout the game.
The first opportunity of the contest fell to Ireland after six minutes. Kevin Zefi floated past three players before firing off a shot that was well saved by Aaron Alonso.
Ireland forced Alonso into another save when Zefi cut it back for Alex Nolan whose first-time shot was well saved by the Spanish keeper
Spain grew into the game with Gil forcing Shay O’Leary into a smart save early on but Ireland felt they should have had a penalty when Caden McLoughlin seemed to be brought down by Alonso. Referee Rafael Sanchez Lopez waved away protests.
Shortly after it was Spain who found the net after 19 minutes. Mella was able to break through the Irish backline and finish neatly into the bottom corner for the opener.
In 22nd minute it was 2-0 to Spain. Mella was involved again when he floated a cross for Gil to head home from six yards out.
Ireland responded well and forced the Spanish backline into two last ditch tackles but Ireland went in at half-time behind..
In the 46th minute Spain could have extended their lead when Jose Adan Arvelo was allowed into the Irish area but O’Leary produced a great save at the near post.
O’Leary was forced into another save shortly after as Spain struggled to extend their lead.
Ireland had a great chance to get back into the game in the 58th minute when McLoughlin found space and crossed for Adam Murphy who unluckily couldn’t find the finish it needed.
Jason Donohue's side continued to push and McLoughlin was involved again when he did well to dribble past two Spanish defenders before firing off a curling effort that was well saved by Alonso.
Unfortunately the Boys in Green couldn't find the goal their play deserved.
Republic of Ireland: O’Leary (GK); Cowper Gray (Malone 60), O’Brien, Curtis, Heffernan; McManus (Barrett 60), Murphy (Tetteh 75), Ferizaj; McLoughlin, Nolan (O’Brien Whitmarsh 41), Zefi (C) (Murray 50).
Spain: Alonso (GK), Jimenez (Arquellada 56), Bonar (Enriquez 66), Dominguez, Gernandorena; Mas (Otadui 41), Hernandez (Aguilar 66), Arvelo (Bravo 56), Mella (Garcia 41), Herrero (Rivares 56); Gil (C) (Fortuny 41)
Fixtures
February 1: Ireland v Netherlands, Pinatar Arena, Murcia, Spain, KO 3pm (Irish time)
February 3: Ireland v Czech Republic, Pinatar Arena, Murcia, Spain KO 12pm (Irish time)
Results
January 30: Spain 2-0 Ireland