The Andalusian regional government said that sixty-eight medics at the University Regional Hospital in Málaga were diagnosed with the coronavirus.
Health officials said they were investigating the source of the infection, but all 68 people attended the Christmas party on December 1, which was attended by 173 people.
Health officials said those who had contracted Covid-19 had either had an antigen test or a third booster vaccination before attending the party.
Another possible source of infection could be a large meal for hospital staff, officials said.
Mild symptoms have been observed in infected people.
Prime Minister Pedro Sanchez has warned people on Christmas to be cautious about the coronavirus.
“We must not lower our guard,” he told reporters in Madrid.
Health officials in Andalusia have recommended that employees of other public and private hospitals not attend Christmas parties.
Meanwhile, four cases of the Omicron variant have been confirmed in Spain’s Balearic Islands, health officials said.
Officials said a father recently arrived in the Balearic Islands and infected two members of his family and a fourth person recently arrived in Spain from South Africa.
Spain had previously confirmed a total of five cases of the Omicron variant.