In addition to Palestine, the order fought in the Spanish and Portuguese Reconquista. The headquarters of the Templars in Tomar, Portugal, in the Convento de Cristo. They were given extensive possessions and castles in frontier land. At one point, they were to inherit the kingdom of Aragon, jointly with other military orders.

The Templar Knights were identifiable by their white surcoat with distinct red cross emblazoned above the heart or on the chest, as seen in many portrayals of crusading knights.

In 1135, the Order started lending money to Spanish pilgrims who wanted to travel to the Holy Land. The Knights' involvement in banking grew over time into a new basis for money, as Templars became increasingly involved in banking activities. One indication of their powerful political connections is that the Templars' involvement in usury did not lead to more controversy within the Order and the church at large. The charge was typically sidestepped, by a stipulation that the Templars retained the rights to the production of mortgaged property.

The Templars' political connections and awareness of the essentially urban and commercial nature of the Outremer communities naturally led the Order to a position of significant power, both in Europe and the Holy Land.

Their success attracted the concern of many other orders and eventually that of the nobility and monarchs of Europe as well, who were at this time seeking to monopolize control of money and banking after a long chaotic period in which civil society, especially the Church and its lay orders, had dominated financial activities. The Templars' holdings were extensive both in Europe and the Middle East, including for a time the entire island of Cyprus.

On October 13 (the unlucky Friday the 13th), 1307, most of the Knights Templar in France were simultaneously arrested by agents of Philip the Fair (Philippe le Bel), to later be tortured into admitting heresy in the Order. The dominant view is that Philip, who seized the treasury and broke up the monastic banking system, was jealous of the Templars wealth and power, and sought to control it for himself. These events, and the Templars' original banking of assets for suddenly mobile depositors, were two of many shifts towards a system of military fiat to back European money, removing this power from Church orders. Seeing the fate of the Templars, the Hospitallers of St John of Jerusalem and of Rhodes and of Malta were also convinced to give up banking at this time. Much of the Templar property outside of France was transferred by the Pope to the Knights Hospitaller, and many surviving Templars were also accepted into the Hospitallers.

Many kings and nobles supported the Knights at that time, and only dissolved the order in their fiefs when so commanded by Pope Clement V. Robert the Bruce, the King of Scots, had already been excommunicated for other reasons, and was therefore not disposed to pay heed to Papal commands.

In Portugal the order's name was changed to the Order of Christ, and was believed to have contributed to the first naval discoveries of the Portuguese. Prince Henry the Navigator led the Portuguese order for 20 years until the time of his death. In Spain, where the king was also against giving the heritage of the Templars to Hospitallers (as commanded by Clement V), the Order of Montesa took Templar assets.

While some historians and authors have tried to draw a link from Freemasonry and its many branches to the Templars, no such link has been either claimed by these organizations or proven. The Order of the Solar Temple was an example of a "neo-Templar" group, founded by Luc Jouret and Joseph Di Mambro in 1984, that fraudulently claimed descent from the original Knights Templar.

Although there are several self-styled orders that claim to be descended from, or revivals of, the Templar Order, an ecumenical Christian society based on the principles of chivalry, which styles itself as the Sovereign Military Order of the Temple of Jerusalem, (SMOTJ) was founded in 1804, with the support of Napoleon. It is dedicated to charitable works and antiquarian research.

This "order," though not a genuine Order of Chivalry, operates on the basis of the traditions of the medieval Knights Templar. In 2001, the United Nations appointed the SMOTJ group as a non-governmental observer (NGO), which does not necessarily contribute to recognition as an Order of Chivalry. To be an Order of Chivalry in reality, an organization must be established as an Order by the country in which it is headquartered, with the head of State as its sovereign. SMOTJ has neither qualification.