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The 1998 Intercontinental Cup was a football match played on 1 December 1998 between Real Madrid, winners of the 1997–98 UEFA Champions League, and Vasco da Gama, winners of the 1998 Copa Libertadores. The match was played at a neutral venue, the National Stadium in Tokyo, in front of 51,514 fans. Real Madrid forward Raúl was named as man of the match.

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The 2000 FIFA Club World Championship was the inaugural FIFA Club World Cup, the world club championship for men’s club association football teams. It took place in Brazil from 5 January to 14 January 2000. FIFA, football’s international governing body selected Brazil as the host nation on 3 September 1997 as the bid was found to be the strongest among a total of nine candidates. The draw was made at the Copacabana Palace in Rio de Janeiro on 14 October 1999. All matches were played in Rio de Janeiro’s Estádio do Maracanã and São Paulo’s Estádio do Morumbi. Eight teams, two from South America, two from Europe and one each from North America, Africa, Asia and Oceania entered the tournament. The first Club World Cup match took place in São Paulo, and was won by Spanish club Real Madrid, who defeated Saudi club Al-Nassr 3–1. Nicolas Anelka of France scored the first goal in Club World Cup history, while Brazilian champions Corinthians’ goalkeeper Dida posted the first official clean sheet in the tournament. Corinthians and Vasco da Gama each won their respective groups to qualify for the final. In front of a crowd of 73,000, the final finished as a 0–0 draw after extra time. The title was decided by a penalty shoot-out that Corinthians won 4–3. As winners, Corinthians received $6 million in prize money, while Vasco da Gama received $5 million. Necaxa beat Real Madrid in the third-place play-off to claim $4 million. Real Madrid received $3 million, and the other remaining teams were awarded $2.5 million.

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This was the season that marked the start of the Vicente del Bosque era of trophy winning at the club, having taken over from John Toshack early in the campaign. The squad was also largely different from the previous squad, with the arrival of Steve McManaman and Nicolas Anelka from the English Premier League, as well as local talents Míchel Salgado, and Iván Helguera, to support the budding young talent of Raúl, Iker Casillas, Fernando Morientes and Guti, as well as the older veterans such as Fernando Hierro and Roberto Carlos.

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Real Madrid returned to domestic league glory under Vicente del Bosque managerial after 3-1 victory against Athletic Bilbao in the season finale. But Real Madrid was surprisingly sacked Vicente del Bosque after del Bosque not offered his new contract. Real Madrid were also on course of retaining UEFA Champions League La Decima title before being eliminated by Italian league champions Juventus. In the domestic cup, Real Madrid were also eliminated by eventual Copa del Rey champions RCD Mallorca with 1-5 aggregate loss.

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The 2002 Intercontinental Cup was a football match played on 3 December 2002, between Real Madrid of Spain, winners of the 2001–02 UEFA Champions League, and Olimpia of Paraguay, winners of the 2002 Copa Libertadores. The match was played at the neutral venue of the International Stadium Yokohama in Yokohama in front of 66,070 fans. This encounter marked a special occasion for Olimpia and Real Madrid, as both teams celebrated their centenary in 2002. Ronaldo was named as man of the match. Ronaldo opened the scoring for Real Madrid in the 14th minute shooting low right footed past the goalkeeper from inside the penalty box. The second goal was scored by Guti in the 84th minute, heading home at the near post after a cross from Luís Figo on the right.

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As the summer 2003 transfer window approached, Manchester United appeared keen to sell Beckham to Barcelona and the two clubs even announced that they reached a deal for Beckham’s transfer, but instead he joined reigning Spanish champions Real Madrid for €37 million on a four-year contract. Beckham was the latest signing in the Galácticos era of global stars signed by club president Florentino Pérez every summer. The news came as a bitter blow to the newly elected Barcelona president Joan Laporta, who based much of his presidential campaign on signing Beckham. Though announced in mid-June, the transfer was completed on 1 July 2003, making him the third Englishman to play for the club, after Laurie Cunningham and Steve McManaman. Following a successful medical on 2 July, Beckham was unveiled in front of 500 accredited journalists from 25 countries at Real’s basketball facility, where he was handed the famous white shirt by club legend Alfredo Di Stéfano. Although Beckham had worn the number seven shirt for Manchester United and England, he was unable to wear it at Madrid as it was assigned to club captain Raúl. He decided to wear number 23 instead, citing his admiration of basketball player Michael Jordan, who also wore the number 23 shirt, as the reason behind his decision. In the week before Beckham’s presentation, Real named Carlos Queiroz as their new head coach, meaning that Beckham was reunited with a familiar face upon arriving to Madrid, since Queiroz had spent the previous season as Alex Ferguson’s assistant at Manchester United. In late July 2003, the club went on a tour of the Far East as part of pre-season training, but also to cash in on Beckham’s huge marketing appeal in Asia, where he enjoyed tremendous following. Real’s brand recognition in that part of the globe was already well established as the club made financially successful trips to Asia during previous off-seasons. The presence of a global marketing icon such as Beckham, however, made this particular tour a financial smash for los Merengues. Shortly after his transfer to Real, Beckham also ended his relationship with agent Tony Stephens of SFX Europe, who had guided him through his career until that point, including helping to engineer Beckham’s move from Manchester to Madrid. Beckham signed on with Simon Fuller and his company 19 Entertainment, which already managed the career of Victoria. Beckham also appointed close friend Terry Byrne to be his personal manager. In late August 2003, Real Madrid won the Spanish Super Cup over two legs versus RCD Mallorca, with Beckham scoring the final goal in a 3–0 return leg win at home, thus setting the stage for the start of the league season. Playing in a star-laden team which included three former FIFA World Player of the Year recipients, Zinedine Zidane, Ronaldo and Luís Figo, in addition to Roberto Carlos, Raúl and Iker Casillas, Beckham did not require much time to settle in, scoring five times in his first 16 matches (including a goal less than three minutes into his La Liga debut). Queiroz mostly favoured the adaptable 5–3–2 formation, with two fullbacks Míchel Salgado and Roberto Carlos, often joining the attack down the wings, while Beckham played on the right of the three-man midfield, alongside Zidane and Figo. Real Madrid were runners-up in the Copa del Rey, were knocked out of the UEFA Champions League at the quarter-final stage and finished the league season in fourth place, meaning the team, whose president Pérez expected them to win either the Spanish league or the Champions League each season, did not match expectations. In July 2004, while Beckham was in pre-season training in Spain, an intruder scaled a wall at the Beckham home while carrying a can of petrol. Victoria and their children were in the house at the time, but security guards apprehended the man before he reached the house.

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After the 2006 World Cup, the Calciopoli trial verdicts relegated Juventus to Serie B, Cannavaro followed Juve manager Fabio Capello to Real Madrid. Real Madrid paid €7 million to sign him and gave him the No. 5 shirt that had previously been worn by former Madrid player and French international Zinedine Zidane. Cannavaro spent three seasons at Madrid, winning the La Liga title in 2006–07 and 2007–08, and being named the 2006 FIFA World Player of the Year, also winning the 2006 Ballon d’Or. Cannavaro was elected as part of the 2006 and the 2007 FIFPro World XI squads, and the 2006 UEFA Team of the Year. He was named in the six man shortlist for the 2007 Laureus World Sportsman of the Year.

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On 28 May 2010, it was confirmed that Mourinho would take over from Manuel Pellegrini at the Santiago Bernabéu Stadium. On 31 May 2010, Mourinho was unveiled as the new manager of Real Madrid after signing a four-year contract, and became the 11th manager in the past seven years at the club. Mourinho was appointed sporting manager as well as first-team coach, and he was regarded by some as a Galáctico (a term more often used for star players instead of coaches). Prior to Mourinho’s arrival, Real Madrid had underperformed despite paying record transfer fees for Galácticos such as Kaká and Cristiano Ronaldo. Their 2009–10 season was marked by disappointments such as Alcorconazo, a shock 2009–10 Copa del Rey round of 32 knockout by Segunda División B team Alcorcón, and elimination from the Champions League by Lyon in the round of 16, though they finished second in La Liga with a club record 96 points. By the end of the transfer window, after the 2010 FIFA World Cup, Mourinho had brought four new players to the squad: the Germans Sami Khedira (€13 million) and Mesut Özil (€15 million), Portuguese defender Ricardo Carvalho (€8 million) and Argentine winger Ángel Di María (€25 million plus €11 million on incentives). Mourinho spent three years in Madrid winning La Liga in 2011-2012, Copa del Rey in 2010-2011 and Supercopa de España in 2012. Following the 2013 Copa del Rey final loss to Atlético Madrid on 17 May, Mourinho called the 2012–13 season “the worst of my career”. Three days later, Real Madrid president Florentino Pérez announced Mourinho would leave the club at the end of the season by “mutual agreement”, a year after signing a contract extension to 2016.

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Between 23 February 2002 and 2 April 2011, Mourinho went 150 home league matches unbeaten: 38 (W36–D2) with Porto, 60 (W46–D14) with Chelsea, 38 (W29–D9) with Internazionale and 14 (W14–D0) with Real Madrid. The run was broken by Sporting de Gijón on 2 April 2011, when they defeated Real Madrid 1–0 at the Santiago Bernabéu in La Liga. After the match, Mourinho entered Gijón’s dressing room and congratulated them. His only prior home league defeat had come when Porto lost 3–2 to Beira-Mar on 23 February 2002. Mourinho underwent a 45 home league matches unbeaten streak: 31 (W27–D4) with Real Madrid and 14 (W13–D1) with Chelsea. This streak was ended on 19 April 2014, when Chelsea lost 2–1 to Sunderland.