Villalonga was appointed manager of Real Madrid during the middle of the 1954–55 season and subsequently coached a team that included Alfredo Di Stéfano, Francisco Gento, Miguel Muñoz, Hector Rial and later, Raymond Kopa.

With Villalonga in charge and with a team that included Enrique Collar, Miguel Jones and Adelardo, Atlético defeated Real in two successive Copa del Generalísimo finals in 1960 and 1961.

Chus Pereda put Spain ahead after six minutes but a late Marcelino Martínez header was needed to win after Galimzian Khusainov equalised with a free-kick.

Two consecutive defeats to Germany and Argentina after a 2–1 win over Switzerland left Spain and Villalonga to an early return home.

In 1967, he was appointed director of the National Coaches School, a position he held until his death in 1973, and was the first Teacher of Football in the INEF Madrid.