King Juan Carlos, 75, who had back surgery three months ago, walked with crutches at the brief remembrance ceremony for fallen soldiers at a war memorial in central Madrid on Spain's annual Armed Forces Day.
He stood in his green military uniform saluting alongside his son Prince Felipe, who suffered an embarrassment when he was booed as he sat down at the opera in Barcelona — the latest sign of the royal family's troubles.
Juan Carlos won wide respect in Spain for helping guide it through a political transition after the death of dictator Francisco Franco in 1975, but his popularity has plunged recently.
He has been embarrassed by a corruption scandal implicating his youngest daughter Christina, whose tax affairs are being investigated by a judge.
The King's son-in-law, Cristina's husband Inaki Urdangarin, has been under investigation since late 2011 for alleged embezzlement.
Juan Carlos also issued a public apology last year for going on a luxury game-hunting trip to Botswana as Spaniards struggled in a recession.
The King had both hips replaced last year and underwent surgery for slipped discs in March — his seventh operation in three years.
A study by the state polling institute CIS last month showed public confidence in Spain's royal family had plunged to a new low in the past year and a half.
Speculation has risen that the King may abdicate in favour of Felipe, who has taken a bigger role lead in official royal functions over recent months as the king has reduced his own appearances.
Defence Minister Pedro Morenes said in an interview in El Mundo newspaper that this year's military ceremonies were smaller, with no parades, thereby making a "big saving".
Battling to fix the public finances, the government has cut the defence budget to €6 billion this year compared to 8.5 billion in 2008.
A defence ministry spokesman told AFP it spent €90,000 on Saturday's ceremony compared to €200,000 in 2012 and €1.3 million in 2011.
Morenes insisted in the interview that "national security is guaranteed" despite the cuts, and voiced support for the king as the head of the armed forces.
"In difficult times like this, the monarchy in Spain is a fundamental element of stability," the newspaper quoted him as saying.