The observation of the supernova remnant N132D by the scientific instruments on board the XMM-Newton satellite is presented. The X-rays from N132D are dispersed into a detailed line-rich spectrum using the Reflection Grating Spectrometers. Spectral lines of C, N, O, Ne, Mg, Si, S, and Fe are identified. Images of the remnant, in narrow wavelength bands, produced by the European Photon Imaging Cameras reveal a complex spatial structure of the ionic distribution. While K-shell Fe emission seems to originate near the centre, all of the other ions are observed along the shell. A high O VII / O VIII emission ratio is detected on the northeastern edge of the remnant. This can be a sign of hot ionising conditions, or it can reflect relatively cool gas. Spectral fitting of the CCD spectrum suggests high temperatures in this region, but a detailed analysis of the atomic processes involved in producing the O VII spectral lines leads to the conclusion that the intensities of these lines alone cannot provide a conclusive distinction between the two scenarios.