Santaolalla initially rose to prominence in Argentina as the guitarist and original frontman of the rock band Arco Iris, which he cofounded in 1967.

The band adopted the lifestyle of a yoga commune guided by former model Danais "Dana" Winnycka and her partner, musician Ara Tokatlian.

The band had a few hits, such as "Mañanas Campestres" ("Country Mornings"), and made inroads into different forms of musical expression (notably a ballet piece for Oscar Aráiz).

However, Santaolalla felt constricted by the strict requirements of Dana's teachings, which prohibited the consumption of meat, alcohol, and drugs; he left the group in 1975.

[6] In 1976, Santaolalla assembled Soluna, a band in which he played alongside teenage pianist and singer Alejandro Lerner and his then-girlfriend Monica Campins.

He then left for Los Angeles, where he adopted a rock and roll sound and formed the band Wet Picnic with ex-Crucis member Aníbal Kerpel.

He provided the instrumental music for the soundtrack to the 2005 film Brokeback Mountain, from which "A Love That Will Never Grow Old" won the 2006 Golden Globe Award for Best Original Song.

Santaolalla acted as the producer of Gaby Kerpel's Carnabailito and co-produced the Kronos Quartet's Nuevo, an album which renders homage to the musical heritage of Mexico.

These include the opera Ainadamar, based on the murder of Spanish poet Federico García Lorca, and Ayre, a collection of folk songs, in which Santaolalla plays with a group that calls itself The Andalucian Dogs.

[10] On 20 and 21 September 2019, Eric Clapton invited Santaolalla to participate at his Crossroads event at the American Airlines Arena in Dallas, Texas.

He also played in the last song of the event on with Clapton, Gary Clark Jr, Buddy Guy, John Mayer, Susan Tedeschi, Derek Trucks, Jimmie Vaughan, James Bay and others.