A product of local Real Sociedad's youth system, Illarramendi was born in Mutriku, Gipuzkoa, and he spent the vast majority of his first four senior seasons with the B team,[2] contributing 27 games and two goals in 2009–10 as the Basques returned to Segunda División B after one year out.

On 19 June 2010, in the last day of the Segunda División campaign, as the first team had already sealed promotion to La Liga as champions, he made his first official appearance, in a 4–1 away loss against Elche CF.

[8] On 12 July 2013, Illarramendi signed a six-year contract with Real Madrid for a fee of €32.2 million,[9] the highest amount paid by the club for a Spanish player.

[19] On 26 August 2015, Illarramendi returned to Real Sociedad, signing a six-year deal[20][21]– the transfer fee was not officially disclosed by the clubs, but was stated in the media as being between €15–17 million, around half of the figure paid in the opposite direction two years previously.

[28] On 30 August 2019, Illarramendi suffered a broken fibula in a Basque derby match against Athletic Bilbao;[29] it was presumed the injury would keep him out for a few months, but it was found he required surgery to his shin and ankle ligaments, and he did not feature again prior to the season being halted in March 2020 due to the COVID-19 pandemic in Spain.

[35] Manager Julen Lopetegui first called up Illarramendi for the senior side in March 2017, ahead of a 2018 FIFA World Cup qualifier against Israel and a friendly with France.

[36] Additionally, he played for the Basque XI from 2013 onwards, opening a 3–1 win over FIFA member Tunisia at the San Mamés Stadium on 30 December 2016.