The highest temperature recorded on Thursday was 45.2C near Abrantes, a town 93 miles north-east of the capital, Lisbon, the IPMA weather agency said.
Temperatures in Portugal are forecast to continue to build today to around 45C, and to peak at 47C in some places on Saturday.
Portugal’s highest temperature ever recorded was 47.4C in 2003.
Temperatures are being driven higher by a hot air mass moving northward from Africa.
The hot air is also carrying dust from the Sahara Desert into Portugal, meteorologists said.
Emergency services have issued a red alert, placing extra services such as medical staff and firefighters on standby until Sunday.
The World Meteorological Organisation said continental Europe's record is 48C in Greece in 1977.
In northern Europe, Sweden is still under threat from wildfires, which in recent weeks have extended into the Arctic Circle.
Sweden's Civil Contingencies Agency warned of "a high risk" for wildfires in central and southern Sweden this weekend because of the continuing dry weather and strong winds.
In Spain, heat warnings were also issued for 41 of the country's 50 provinces as temperatures were expected to reach up to 44C.
Summer temperatures close to 40C are not unusual in southern parts of the Iberian peninsula.
Spain's highest recorded temperature is 46.9C in Cordoba, a southern city, last July.