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In the eighteenth century the Algarve was affected by two large and destructive earthquakes. The first occurred in 1722, had an estimated magnitude of between 6.5 and 7.8 M and severely affected the coastal zone of the central Algarve. Thirty three years later in 1755 the 'Lisbon earthquake' (magnitude c. 8.5 M) killed around 12 000 people in Portugal, of whom just over 1000 lived in the Algarve. With an estimated cost of between 32 and 48% of Portugal's gross national product, in financial terms it is the greatest natural disaster to have affected western Europe and its effects on the Algarve, the region closest to the epicentre, were devastating. Using data collected in the field together with archival materials the authors discuss: the economic and social impacts of these two eighteenth century earthquakes and their associated tsunamis on the Algarve; and recovery of the region in the years that followed. Today the Algarve is a major European tourist destination with a resident population of c.430 000, a figure which almost doubles at the height of the tourist season. The 1722 and 1755 earthquakes were not isolated events, but part of a long and destructive seismic history, and today the region is highly exposed to the effects of future earthquakes and tsunamis. The paper concludes with a discussion of current attempts being made by the Portuguese authorities to reduce hazard exposure by means of building codes, the production of hazard maps and emergency plans. In these plans a 1755 type event is viewed as a worst-case scenario, although because of its epicentral location near to the economic heart of the region and in spite of its smaller size, a 1722 type event would be far more destructive. [ABSTRACT FROM AUTHOR]