An earthquake measuring 3.6 on the Richter Scale was recorded northwest of Portimão on Monday evening, the Portuguese Met Office said.
Several residents in Portimão reported feeling the earthquake, with many people reported to have headed outdoors as the earth shook beneath them just after 7pm on Monday evening
One resident in Alvor told The Portugal News: "We have been living here for more than 20 years and while we have felt some earthquakes over the years, this was by far the strongest."
Another frightened resident in Praia da Rocha said: "My whole house jumped. It was like an explosion with no bang."
In a statement, the Portuguese Met Office said it was recorded 8 kilometres northwest of Portimão.
The earthquake is not believed to have caused any significant damage, but officials said further information would be available in the event of any occurrences resulting from the earthquake being made available.