AD Plus Ultra
In 1948, Agrupación Deportiva Plus Ultra, a local amateur team, then playing in the Tercera División, agreed to become a feeder club for Real Madrid. Originally formed in 1930, the team took its name from the national motto of Spain. Real gave AD Plus Ultra financial support and in return were given first refusal on the club's best players. By 1949, they made their debut in the Segunda División and in 1952, the club became the official Real reserve team. In 1959, they reached the quarter-finals of the Copa del Rey, losing 7–2 on aggregate to eventual finalists Granada.
During the 1950s and 1960s, future senior Real Madrid players and internationals such as José María Zárraga, Enrique Mateos, Ramón Marsal, Pedro Casado, Juan Manuel Villa, José María Vidal, Fernando Serena and Ramón Grosso all spent time at the club. Luis Aragonés also briefly played for Plus Ultra and Miguel Muñoz began his coaching career at the club. In 1972, Plus Ultra folded because of the demise of the insurance company of the same name, and their position in the Tercera División was taken by Castilla Club de Fútbol, the new reserve team for Real Madrid, on 21 July.
As Castilla CF, the team enjoyed something of a golden age. During this era, with a team that included Agustín, Ricardo Gallego and Francisco Pineda, Castilla reached the final of the 1979–80 Copa del Rey. During their cup run, they beat four Primera División teams, including Hércules, Athletic Bilbao, Real Sociedad and Sporting de Gijón. The latter two eventually finished second and third in the Primera División. In the final, they played Real Madrid but lost 6–1. Because Real also won the Primera División, however, Castilla qualified for the 1980–81 European Cup Winners' Cup. Despite beating West Ham United 3–1 in the opening game at the Santiago Bernabéu, they lost the return 5–1 after extra time and went out in the first round. Castilla reached the quarter-finals of the Copa del Rey on three further occasions, in 1984, 1986, and 1988.
In 1984, with Amancio Amaro as coach, Castilla won the Segunda División. Amaro's tenure as coach saw the rise of the famous La Quinta del Buitre – Emilio Butragueño, Manolo Sanchís, Martín Vazquéz, Míchel, and Miguel Pardeza. Castilla were ineligible for promotion, however, because Real Madrid were already in the Primera División. In the 1987–88 season, they finished third in the Segunda División, but were once again ineligible for promotion.
Real Madrid B
In 1991, the banned the use of separate names for reserve teams and Castilla CF became known as Real Madrid Deportiva and then Real Madrid B. In the early 1990s, two former Castilla players, Vicente del Bosque and Rafael Benítez, began their coaching careers with the team. In 1997, the team was relegated to the Segunda División B, but despite this, they continued to produce internationally acclaimed players. These have included , and Iker Casillas, who all became established members of the senior Real Madrid team.
Real Madrid Castilla
In the 2004–05 season, coach Juan Ramón López Caro guided the team back to the Segunda División and the team subsequently revived the El Castilla name and became known as Real Madrid Castilla. In 2006, the new stadium of the club's training facilities Ciudad Real Madrid was named the Alfredo di Stéfano Stadium and Francisco Moreno Cariñena became the first independent chairman in 16 years. In this year, the team also has continued to produce quality players such as Roberto Soldado and Álvaro Arbeloa.
In the 2006–2007 season, the team was relegated to the Segunda División B under the management of ex-Real Madrid legend after occupying 19th place in the league in a disappointing season. Míchel received a lot of criticism and accepted all the blame for the team's bad performances, especially for those who had a wonderful season in the 2005–06 season, such as Rubén de la Red, Esteban Granero and Javi García. The reserves produced other quality players, including Juan Mata and Álvaro Negredo.
Real Madrid Castilla was promoted back to Segunda División at the end of the season 2011–12 after beating Cádiz in the play-offs with aggregate score 8–1.
In the 2013–14 season, three key players , Álvaro Morata and Jesé were promoted to the first team, and then Castilla was relegated in the last matchday after being defeated by Real Murcia in the last match of the season.
In the 2015–16 season, Lucas Vázquez, who was loaned to Espanyol at the 2014–15 season signed a permanent deal with Espanyol, but Vázquez returned to Real Madrid, definitely with the first team.