Wilson Palacios had two different spells at Olimpiain his native Honduras before calling it quit with playing football professionally two years ago. His first spell at the club started in 2002 and it last for six years until 2008. Wilson Palacios had moved from Victoria where he started his career as a young footballer at the age of 16. Wilson Palacios and his brothers John, Edwin, Milton and Jerry all moved from Victoria to Olimpia. Wilson scored 32 goals in 102 matches for Olimpia while he was at the club in his first spell, winning five league titles. He would be fondly remembered for the goal that he scored from the halfway line against Marathon to hand Olimpia the 2005/06 Clausura title.

Honduras international Wilson Palacios tried to sign for Red Star Belgrade after a successful loan spell in 2007 but the Serbian club was unable to meet his salary demands of $1.5m for a three-year deal. Paalacios was on trial at the Serbian club for less than a month. Apart from Red Star Belgrade, Wilson Palacios also had trials with Cagliari in the Italian Serie A, Premier League team Arsenal and French giants AS Monaco before he eventually signed for Birmingham City on loan.

Wilson Palacios was on loan at St. Andrews for six months before Wigan Athletic signed him permanently at the end of his loan spell with Birmingham City. He benefited from the good working relationship he had with manager Steve Bruce while he was at Birmingham City. Bruce left Birmingham City to sign for Wigan Athletic and he went on to sign Wilson Palacios for the Latics after his replacement at Birmingham City, Alex McLeish opted against making his loan deal permanent.

Palacios returned for a second spell at Olimpia during the 2008/09 campaign and he played just three times for the club before signing for hisReal Sociedad, his last team as a professional footballer.