Iliya was born in the city of Berovo, at the time part of the Rumelia Eyalet of the Ottoman Empire (in modern eastern North Macedonia), into a poor farmer family.

The birthdate is given as 28 May, while the birthyear is unclear; early literature place it at 1805, while Vasil D. Stoyanov said that Ilyo was 45 years of age in 1867 (thus born in 1822).

Ilyo was a prominent Hajduk voyvoda (commander) of cheta's (armed bands) in Maleshevo, Rila and Pirin.

His band joined the Western divisions of general Joseph Vladimirovich Gourko and participated in the liberation of Sofia, Radomir and Kyustendil.

Illyo was one of the Bulgarian representatives at the signing of the Treaty of San Stefano which marked the restoration of Bulgaria in its ethnic borders.