Guitarist Jason Hodges and original vocalist Mark Snedden formed the band as Iliad in 1998 having previously played together in Oracle in the early 1990s. This embryonic version of the band also included former Oracle guitarist Kris Arendse and the final Oracle bassist Michael Noonan, as well as drummer David Pearson. With the introduction of Adam Smith (also formerly of Oracle) on guitar, the band changed its name to Ilium, with Kris leaving the band after a brief stint with three guitarists. In 2002 the band commenced work on their eponymous debut EP produced by Lord Tim, but Michael Noonan played on only two tracks before leaving the band, with Adam Smith completing the bass duties and yet another former Oracle member Matthew Woodland joining the band shortly before it's release. The EP, which included a cover of the Fleetwood Mac/ Judas Priest classic 'The Green Manalishi (With The Two-Pronged Crown)', gained the attention of several notable labels, including Sentinel Steel boss Denis Gulbey, with Italian label Adrenaline's metal label Steelheart signing the band for the release of their debut.

Ilium then began recording the debut album Sirens Of The Styx with Dungeon's Lord Tim producing and Steve Moore playing drums. The album was released on 18 December 2003. It contained the track "Incipience: Beowulf Defeats Grendel", part one of a trilogy centred around the Beowulf legend. (Parts 2 and 3 are included on "Vespertilion".) Another song, "The Celestial Sphere", later became the subject of Ilium's first video clip. After the recording of the album, Peter Gilchrist became the band's bassist, with drummer David Walmsley joining shortly thereafter.

While the first album awaited release, the group announced plans to begin recording its next two albums concurrently, but with the departure of vocalist Mark Snedden due to family and financial restraints, and unforseen technical difficulties the band decided to combine songs from the two proposed albums and release a single album, 'Permian Dusk'. Lord Tim, who had performed backing vocals on both the EP and the debut 'Sirens Of The Styx' was recruited as the band's lead vocalist. Gilchrist and Walmsley both left Ilium at the end of 2003, Gilchrist recorded the demos for the songs but the bass on the album was played by Smith, with Walmsley completing the drum duties on the album before exiting the band. During this album Tim's vocal style, which was more in tune with pivotal members Smith and Hodges' vision for the band than his predecessor's, help Ilium garner considerable international praise, whilst the production duties were taken over largely by Smith and Hodges. Late in 2004, Gilchrist and Walmsley rejoined Ilium, and Gilchrist's 15 year old son Corey was also drafted into the group ..boards, with his ample vocal talents slated to provide extra body to Ilium in the live arena. Corey Gilchrist had been a contestant on the TV talent and reality show Australian Idol and twice has reached the top 100, but on both occasions was cut before having a chance to go before the public (though he did appear on the show in both seasons).

David Walmsley again left Ilium as Permian Dusk was being mastered and was replaced by Dungeon's Tim Yatras. Before any further plans could be made, however, Corey Gilchrist was hit by a train in October 2005 and had his foot amputated as a result, devastating all members of the band. This also forced both he and his father out of the band. The younger Gilchrist recovered and again featured on Australian Idol, getting into the semi-finals. With this came the decision by Adam and Jason that Ilium would remain a studio project and future projects would feature guest musicians.

Permian Dusk was released in November 2005. The album won a particularly strong review from German metal magazine Rock Hard!, which gave it a score of 9.5/10 and led to reviewer Wolfram Kueper claiming it to be the best power metal album of 2005. Ilium produced a video clip for the track "Chloroform Divinity" from this album. This was by no means a unique assessment however, with the bands combination of unusual and intelligent lyrical content (largely by guitarist and published author of supernatural fiction, Jason Hodges), superb melodic guitarwork and soaring vocals proving popular with a broad cross-section of metal fans.

In November 2006, it was announced that Swedish keyboardist Kaspar Dahlqvist, a former member of bands including Dionysus, Stormwind, Treasureland and Circle II Circle, and Uli Kusch's (Helloween/Masterplan/Beautiful Sin/Gamma Ray) latest project Ride The Sky had joined the Ilium line-up, but he was later forced to withdraw for personal reasons, which also led him to withdraw from Ride The Sky. The band's third 'Vespertilion' was released in Dec 2007 and again has been given very favourable reviews by Rock Hard! and other publicat