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Aim The geographical distributions of animal and plant species endemic to the Iberian Peninsula and Balearic Islands were analysed to locate and designate areas of endemicity.Location The Iberian Peninsula and the three largest Balearic Islands (Mallorca, Menorca and Ibiza) in the western Mediterranean, West Palaearctic region.Methods The information analysed consisted of presence/absence data of animal and plant species, recorded on a 100 × 100 km grid based on the UTM projection system. From a larger initial data set, a simplified matrix of 480 species present in at least two quadrats was obtained, and processed to estimate the overall similarity patterns across land squares, and the areas of endemism. Two methods were employed to detect areas of endemism: Wagner Parsimony (PAE, or parsimony analysis of endemicity) and compatibility. A modification of PAE, PAE–PCE (Parsimony analysis of endemicity with progressive character elimination) was applied to overcome some of the potential shortcomings of the method.Results The results represent the first attempt for a combined analysis of animal and plant distributions in the western Mediterranean. The proposed PAE–PCE procedure proved useful to identify areas of endemism that would have been otherwise overlooked. Up to thirty-six different areas of endemisms were identified. Some of these represent concentric (hierarchically nested) structures, while other are partly overlapping sectors. The endemism areas, as derived from parsimony and compatibility analyses, generally fit within the frame of the overall similarity approach.Main conclusions The areas of endemicity identified often coincide with mountain sectors, and this may be of incidental interest for conservation policies as most natural preserves in the study area are located in mountain ranges. The conclusions are of interest for large scale approaches to the biogeography of the Mediterranean Basin, facilitating the selection of endemism areas for operative purposes. However, most of the best supported areas of endemism detected are relatively small, or overlap with neighbouring endemism areas. Hence, adopting large area units such as `Iberia' for historical analysis at a wider geographical scale may be risky, because such units may actually represent composite sectors of an heterogeneous nature. The distribution of the areas of endemism, as well as the results of the overall similarity classification, share a number of features with previous sectorizations from independent, mostly phytogeographical, approaches. Parsimony analysis of endemicity is a potentially useful tool for identifying areas designated by species with congruent distributions, but (1) the results have no direct historical implications (for phylogenetic information is not incorporated), and (2) unless modifications such as the PAE–PCE procedure are applied, the number of potential areas of endemism (in the sense stated above) will often be underestimated. It is also shown that, in a PAE, a `total evidence' approach is to be preferred to a consensus of partial (taxon-specific) results.