The Lisbon sports clubs Sport Lisboa e Benfica (commonly "Benfica" also "Benfica Lisbon") and Sporting Clube de Portugal (commonly "Sporting" also "Sporting Lisbon"), have many sports teams in the highest Portuguese divisions and European competitions. Belenenses, another important club with a great tradition in Portuguese sport, is also from the Portuguese capital.

Football is the most popular sport in Lisbon. Major football clubs include S.L. Benfica, with its home 65,000 seat stadium the UEFA Elite stadium Estádio da Luz (named after the area in which the stadium is situated (Luz) and not, as is popularly believed, 'Stadium of Light'). Benfica has won the UEFA Champions League twice and has appeared in the final seven times, and Sporting Clube de Portugal, the other major football team from the city, also having a UEFA elite stadium, 52,000 seat Estádio José de Alvalade stadium. It has won the UEFA Cup Winners Cup once and was the UEFA Cup finalist in the 2004-05 season. Former players from this team include Luís Figo and Cristiano Ronaldo. Belenenses is another important football team in the city, having Estádio do Restelo as its home stadium in the Belém neighbourhood of Lisbon. Belenenses holds the distinction of being the first club, other than perennial winners Sporting, Benfica and Porto, to win the Portuguese League, taking the trophy in the 1945-46 season.

Other sports, such as indoor football, handball, basketball and roller hockey are also popular.

There are many other sport facilities in Lisbon, ranging from athletics to sailing to golf to mountain-biking.

Lisbon was among the Portuguese cities which hosted the UEFA Euro 2004 championship. In 2006 and 2007, Lisbon was the starting city of the Dakar Rally. Every March the city hosts the Lisbon Half Marathon.