The two countries are aiming for an agreement allowing free circulation of goods and people between Gibraltar and Spain.
"Today's discussions took place in a constructive atmosphere, with important breakthroughs and additional areas of agreement," the United Kingdom, European Commission, Spain and Gibraltar said in a statement.
"All sides are reassured that the agreement is getting closer and will work closely and rapidly on outstanding areas towards an overall EU-UK agreement," they added.
Foreign ministers from Britain and Spain met alongside European Commission Vice President Maros Sefcovic and Gibraltar government chief Fabian Picardo in a bid to reach a deal over the tiny British territory's status following Britain's 2020 exit from the European Union.
It is the second time they have met in this format after talks in April.
Sefcovic told reporters that the talks covered "new areas" that had not been addressed in the past including the environment, mobility and trade.
Spanish Foreign Minister Jose Manuel Albares would not say what outstanding issues remained and told a press conference no date had been set for the next meeting.
But he said technical teams would be in contact "immediately".
Britain and Spain have disputed control of the tiny territory since it was ceded to Britain in the 1713 Treaty of Utrecht.
The two countries reached a provisional deal in 2020 on free access for goods and people after Brexit, but no definitive agreement has been reached.