Best cities in Spain to visit in August

It will be hot and a great time to understand why siestas are a part of the culture.
Spain offers a large and varied menu to keep the interest of travelers for two weeks.
Due to the size of the country strongly suggest you purchase open jaw tickets and fly into one city while departing another. This will greatly increase trip efficiency and effectiveness.
I would keave out attempts to add portugal or france on this visit.

Following is a sample itinerary:

Fly into Seville, via a flight transfer in Madrid. Arrive Day two (day one is the travel day to Spain), stay day three and on day four depart for Granada.
Train from seville to granada. Arrive day four and depart on day six for Madrid.
Train from granada to madrid. Arrive day six and depart on day nine for barcelona.
Train from madrid to Barcelona. Arrive on day nine and depart for home on day 14 (which is a full travel day)

What you obtain in terms of time:
Seville: 1/2 day, full day and 1/2 day
Granada: 1/2 day, full day and half day
Madrid: 1/2 day, full day, full day and 1/2 day
Barcelona: 1/2 day, three full days and then a travel day home

Now there are a number of options/variations to this trip and i am confident fellow posters will help provide excellent input. But I caution you about the following:

It will be hot and you should consider not trying to max your time in the midst of the heat. Slow down and accept a siesta is a wonderful way to beat the heat.
It will be crowded in august and spain has been experiencing annual tourism increases. Plan carefully how to purchase and obtain entry tickets so you can bypass the lines.
Save money by learning how to purchase advance train tickets. Do your on line research on train ticket purchase in order to max savings and minimize glitches.
Stay up late! Immediately adopt the spanish culture if late night eating and entertaining. A big advanatge is late night means cooler temps.
Seriously consider only three stops: seville, madrid and barcelona. I outlined four cuz most first time travelers want the overpacked trip itinerary. There is ample to do by staying in three cities and allowing time to make day trips. Far less travel hassle and more than you can imagine to do.
Pack lite, really lite. Luggae is a pain in the butt.
Finally, if you are minimum three nights per location then strongly suggest you rent apts.

Thank you so much for your thoughtful reply! We are going to look into all of these things. While I have never done the apartment rental, reading on line it sounds like a great option. We are also considering extending a few days and going to the Basque country as that is where my family is from. I will have to see how all of these cities connect together by train/plane/bus. You just made me so much more excited!!!!

If I had 14 nights I would do something like this...

Arrive Barcelona for 4 nights
Fly to Granada for 2 nights
Train to Ronda for 1 night
Train to Sevilla for 2 nights
Train to Cordoba for 1 night
Train to Madrid for 4 nights

It is absolutely hot everywhere in Spain in August (except perhaps the northern coastline and mountain areas).
If you are young and fit I am sure you will be able to cope - it does make the beer and sangria even more refreshing.

Hi Stephanie,
Unlike some of the other posters, I would steer clear of Andalucía in August. I believe you can have just as awesome a Spain vacation north of Madrid or Barcelona at that time of the year. Your choices are varied; for example you can visit San Sebastian and Bilbao, Leon and Burgos. Mix or match these with Santiago in the west or Pamplona in the east, and you have some fine groupings. If you add Madrid (very, very warm in August, but wonderful a rich museums) and/or Barcelona (warm and very humid in August, but there is always the beach) you can have a great combination of large and smaller cities.
Let's face it, Europe south of Scandinavia, is going to run from very, very warm to out and out hot in August! So get an air conditioned hotel, make frequent cold beverage stops at shady umbrella tabled cafes, and enjoy yourself!

August is best for the north Coast - San Sebastian, Bilbao, Santander over to Santiago de Compostela. Barcelona won't be as bad as further south or inland.

I second Brad. Stay as far north as you can. The suggestion by djp-syd puts you in the middle of the heat and humidity of Spain. That is not a schedule I would look forward to in August.

My suggestion of Andalucia was following on from the previous comment.
If heat is a problem I would recommend the north as well...
Fly to Asturias
Oviedo - 2nts
http://www.barcelo.com/BarceloHotels/en-GB/Hotels/Spain/Oviedo/OviedoCervantes/Home
Picos de Europa - 2nts
http://www.hoteldeloso.com/
Leon - 1nt
http://www.nh-hotels.com/nh/en/hotels/spain/leon/nh-plaza-mayor.html
Orense/Lugo - 1nt
http://www.parador.es/en/parador-de-monforte-de-lemos
San Xenxo - 2nts
http://www.royalnayef.com/?lang=en http://www.hotelsanxenxo.com/index.php?idMenu=16&idIdioma=1#
Santiago de Compostela - 2nts
http://www.costavella.com/ingles/hotel.html
Fly to Madrid

Was in Cordoba last May. The innkeeper said the temperature can exceed 40C in August and some hotels shut their doors due the heat. Even in Ronda, the hotel operators said it can be stifling in late summer. Heed the warnings.

You're all forgetting about Toledo -- even though it is now a very quick hop from Madrid's Atocha station, don't give in to the temptation to do it as a day trip. It deserves one night at least; if you're a history buff, it needs more than one. If your Castilian Spanish is ok, there are marvelous after-sunset guided walks, when the day-trippers have returned to Madrid.
Active lifestyle galore in the surrounding canyons, too.