Ilić was born in Bijeljina, SR Bosnia and Herzegovina, SFR Yugoslavia, and graduated from the School of Applied Arts in Zagreb. He published his first works in 1973, and has since been publishing comics and illustrations in magazines, such as Omladinski tjednik, Modra Lasta, Tina, Pitanja, and Start and has become the art and comics editor of the students' magazine Polet in 1976. That's when he organized an informal organization of the comic book creators Novi kvadrat (The New Square), that has been widely connected to the Novi val musical movement in Zagreb.
That connection also made Ilić design album covers of some of the most prominent Yugoslav bands of the time, such as Bijelo dugme, U škripcu, Prljavo kazalište, Parni Valjak, Azra, Film and many others. He designed the cover for the first album of Prljavo kazalište, which became a widely recognizable and iconic symbol for Punk rock in ex-Yugoslavia. He even wrote lyrics for the song Čovjek za sutra. Ilić appears in Sretno dijete, Igor Mirković's documentary about the Novi val (New Wave) movement in Zagreb, as one of the most prominent figures of the movement. He also appeared in the 2010 Serbian documentary Bijelo Dugme, directed by Igor Stoimenov. He also designed covers for the Croatian political weekly magazine Danas, as well as posters for theaters such as Teatar & TD and posters for movies. His most famous movie poster is for cult film Ko To Tamo Peva.
In 1977, Ilić started publishing his works in the established comics magazines outside Yugoslavia, such as Alter Alter, Métal Hurlant, Heavy Metal and Marvel's Epic Illustrated. In 1980, Novi kvadrat ceased to exist and Ilić entirely stopped working on the comics, and focused upon illustration and graphic design. In 1982, he started working for the Italian magazine Panorama.
He stopped working for the magazines in 1985, and in March 1986 he left Yugoslavia and went to New York "with $1,500 in the pocket and no idea what to do upon getting there". Yet, he soon started publishing his illustrations in Time, New York Times, Wall Street Journal, and many other prominent and influential newspapers and magazines. In 1991, he becomes an art director of Time International, and the following year he became art director of the op-eds in the New York Times.
In 1993, Ilić became one of the co-founders of Oko & Mano Inc. graphic design studio, and in 1995 he founded Mirko Ilić Corp., a graphic design and 3-D computer graphics and motion picture title studio. In 1998, he created the title sequence for the romantic comedy You've Got Mail with Milton Glaser and Walter Bernard.
In 1999, Mirko Ilić Corp. began designing visual identities for luxury hotels and restaurants. Some of his hotel clients include The Time Hotel in New York City, The Joule Hotel in Dallas, TX, Casa Moderna Hotel in Miami, FL, and Alpina Gstaad in Switzerland. Some restaurant clients include Le Cirque and La Fonda Del Sol in New York City, Summit and "Play" at the The Broadmoor Hotel in Colorado Springs, and Charlie Palmer in Dallas, TX.
Since 1999, Ilić has been a professor at the School of Visual Arts for their MFA in Illustration program.
In 2012, Print (magazine) published his monograph by Dejan Kršić with preface by Milton Glaser and introduction by Steven Heller.