Karagounis began his professional career in 1996 when he signed on loan for Apollon Smyrni from Panathinaikos. In his first couple of years with the Athens-based club, he already showed signs of his talent as a very energetic player in the centre of midfield who could also score goals. After two seasons with Apollon, he returned to his parent club Panathinaikos in 1998, the club where he learned his trade.

Karagounis captained Greece’s entry to the 1998 UEFA Under-21 Championship, and the team came very close to winning, losing 1–0 to Spain in the final. After that, he soon became a regular on the national team. He made his first full international appearance against El Salvador in 1999 and went on to appear in qualifying for the 2002 FIFA World Cup.

Karagounis retired from international football after Greece’s World Cup elimination in a penalty shootout loss to Costa Rica. He left as the nation’s most capped player with 139 appearances over 15 years since making his debut in 1999. Greece’s goalscorer in the Costa Rica match, defender Sokratis Papastathopoulos, paid tribute to his departing leader: “He’s written his own story … he’s the record holder [of caps], he’s given everything for the team and had to make concessions for it… He’s left us a legacy for the future. He shouldn’t worry.”

In 2005, Karagounis moved to Portugal to sign a three-year contract with Benfica, who are based at the Estádio da Luz, the stadium where he won the Euro 2004 final with Greece.

The highlight of his international career was undoubtedly winning the UEFA European Championship for Greece at Euro 2004. He was a key player for Greece and famously scored the first goal of the tournament against Portugal, a stunning long-range shot that shocked the hosts and gave Greece the confidence they needed to win the game and progress in the tournament. After winning Euro 2004, Karagounis continued to play on a regular basis for Greece in the 2005 FIFA Confederations Cup, the 2006 World Cup qualifying campaign and the Euro 2008 finals. On 26 March 2008, Karagounis participated in a Greece–Portugal friendly match in Düsseldorf. This proved to be somewhat of a highlight of his international career, as he scored two almost identical well-placed free-kicks to give Greece a 2–1 victory.

Karagounis’ contract with Benfica was due to expire in July 2008, but his immediate departure was negotiated due to personal issues. After his release in the summer of 2007, Karagounis immediately returned to Panathinaikos, signing for the club for the next three years. He quickly re-established himself in the team again, scoring key goals, especially in Europe.

With his acquisition by the Athenians regarded as the start of a new era at the club, Karagounis emerged not only as a leading figure at club level, but for Greece as well. He established himself as the captain of the national team. Karagounis’ grit and dedication continued to give Panathinaikos an edge as the team made progress in Europe. On 3 September 2009, Karagounis extended his stay until 2012 and stated he wanted to end his career at the club. As captain of the team, he won his second Superleague title and the Greek Cup. A 79th-minute strike by Karagounis secured Panathinaikos three UEFA Europa League points in Group F.

Karagounis would return to the Estádio da Luz to play for a Benfica All-Stars team in a charity match against a team that included Zinedine Zidane and Ronaldo in 2010.

Karagounis, as a captain of Greece, contributed to the nation’s qualification for the 2010 World Cup. As captain, he led Greece to its first win in a World Cup match with a 2–1 win against Nigeria. On 8 October 2010, against Latvia, Karagounis reached 100 international appearances, equaling the record of his former Greece teammate Angelos Basinas. On 12 October 2010, Karagounis made his 101st appearance, becoming the second-most capped player in Greek footballing history, behind Theodoros Zagorakis, and scoring his seventh goal in the victory against the Israel national team. On 7 October 2011, Karagounis was awarded by Zagorakis and Basinas for reaching 111 appearances with Greece. The awarding ceremony took place at the Karaiskakis Stadium in Athens before Greece’s kickoff against Croatia.

On 11 September 2012, Karagounis left Panathinaikos to join English Premier League side Fulham on a free transfer. Karagounis became the eighth Greek player from the Euro 2004-winning side to play in the Premier League, after Nikos Dabizas, Stelios Giannakopoulos, Vassilios Lakis, Theodoros Zagorakis, Angelos Basinas and Kostas Chalkias. Speaking at Fulham’s Motspur Park Training Ground, Karagounis said, “I’m delighted to have signed for Fulham Football Club and I am excited by a new challenge in England and the Premier League. I’m looking forward to working under Martin Jol and playing alongside some fantastic players at this Club.” Then-Fulham manager Martin Jol added, “Giorgos Karagounis has a wealth of club and international experience and I’m happy that he’s joined us for this season. He’s been an influential player for his club sides and is a renowned player in world football as he’s about to become the most-capped player for Greece. He brings many certain qualities to our squad.”

Karagounis made his debut for the club in the Premier League on 29 September 2012, against Manchester City at Craven Cottage, coming on in the 81st minute to replace Chris Baird. Karagounis played the full 90 minutes for Fulham in their 4–0 loss to Liverpool at Anfield. He scored his first goal in England on 5 January 2013 in the FA Cup against Blackpool in the 80th minute, with a “stunning 25-yard half-volley” which went in off the underside of the crossbar; the match ended 1–1. On 12 January 2013, a week after his FA Cup strike, he scored his first Premier League goal against Wigan Athletic in the 22nd minute.

On 8 June 2012, Poland played with Greece on the opening day of Euro 2012. Poland goalkeeper Wojciech Szczęsny fouled Greek international Dimitris Salpingidis, resulting in a red card for Szczęsny. Karagounis took the penalty against substitute goalkeeper Przemysław Tytoń, who saved Karagounis’ penalty.

On 16 June 2012, Karagounis started the final match of Group A against Russia, making him Greece’s joint-most capped player with 120 caps, together with Theodoros Zagorakis. Karagounis scored the only goal of the match, at the stroke of half-time. This meant Greece qualified for the next stage of the competition. The second half was slightly less dramatic but had its share of talking points. Coming off a significant goal, Karagounis made a mad dash to the Russian box. The captain looked like he was going to score another, but his leg was caught by a Russian defender. Karagounis was adamant he had earned a penalty, but the referee was not impressed and booked him for simulation. Karagounis received his second yellow card of the tournament, forcing him to miss the quarter-finals.

On 12 October 2012, Karagounis played in the second half in the match against Bosnia and Herzegovina in a 2014 World Cup qualifying match, making the 121st appearance for his country. With this match, he set a new record of most caps for Greece, surpassing Zagorakis. He also scored a free-kick goal against the Liechtenstein national football team. Karagounis played another inspiring and energetic role throughout the qualifying campaign and helped lead to its third World Cup finals appearance. Despite the waning number of starts for the 37-year-old, his influence was still large for Greece. Greece head coach Fernando Santos, who worked with Karagounis at both Panathinaikos and Benfica, held him in high regard due to the sureness the veteran exudes. “We have confidence and know we can beat any opponent”, Karagounis said during World Cup qualifying. Karagounis played the entire 120 minutes of the match between Costa Rica and Greece for the World Cup 2014, consisting of 90 minutes of regular time and 30 minutes of extra time.

However, Karagounis declared his interest to return to Fulham through his agent Paschalis Tountouris. On 9 July 2013, Karagounis signed a new one-year deal to rejoin Fulham. In his second season with the Cottagers, Karagounis scored his only goal in a 4–3 loss for League Cup against Leicester City when he equalised with just three minutes to play, but could not prevent Leicester from scoring a late winner. Karagounis suffered from muscle problems throughout the season, but on 19 April 2014, he came on as a substitute in his last match for the club in a 3–1 away defeat against Tottenham Hotspur. Fulham was relegated from the Premier League at the end of the season.