After graduating with a degree in physical education Mills became a lieutenant in the United States Marine Corps. He gave up running for a while, then returned to it. Mills qualified for the 1964 Summer Olympics on the U.S. Track and Field Team in the 10,000 m run and the marathon. No American had ever won the 10,000 m before Billy Mills did it, and no one from the Western Hemisphere has done it since.
The favorite in 1964 was Ron Clarke of Australia who held the world record. The runners expected to challenge him were defending champion Pyotr Bolotnikov of the Soviet Union, and Murray Halberg of New Zealand, who had won the 5000 m in 1960. Mills was a virtual unknown. He had finished second in the U.S. Olympic trials. His time in the preliminaries was a full minute slower than Clarke's.
Indeed, Clarke set the tone of the race. His tactic of surging every other lap appeared to be working. Halfway through the race only four runners were still with Clarke: Mohammed Gammoudi of Tunisia, Mamo Wolde of Ethiopia, Kokichi Tsuburaya of Japan, and Mills. Tsuburaya, the local favorite, lost contact first, then Wolde. With two laps to go only two runners were still with Clarke. On paper, it seemed to be Clarke's race. He had run a world record time of 28:15.6 while neither Gammoudi nor Mills had ever run under 29 minutes.
Mills and Clarke were running together with Gammoudi right behind as they entered the final lap. They were lapping other runners and, down the backstretch, Clarke was boxed in. He pushed Mills once, then again. Then Gammoudi pushed them both and surged into the lead as they rounded the final curve. Clarke recovered and began chasing Gammoudi while Mills appeared to be too far back to be in contention. Clarke failed to catch Gammoudi but Mills sprinted past them both. His winning time of 28:24.4 was almost 50 seconds faster than he had ever run before and set a new Olympic record for the event.
After the race Mills talked with Clarke and asked if he was straining as hard as he could on the final straightaway to the finish, to which Clarke replied, "Yes." Mills has stated that he tried to be relaxed during his final kick to the finish line and felt that helped him to pass both Gammoudi and Clarke. An infrequently mentioned fact is both Clarke and Mills ran the marathon at the 1964 Olympics after the 10,000 m. Clarke finished in 9th place, Mills finished in 14th, in a respectable 2:22:55.4, approximately two-and-a-half minutes behind Clarke.
Mills later set U.S. records for 10,000 m (28:17.6) and the three mile run and had a 5,000 m best of 13:41.4. In 1965 he and Gerry Lindgren both broke the world record for the six mile run when they finished in a tie at the U.S. AAU nationals, running 27:11.6.
Billy Mills was inducted into the United States Track and Field Hall of Fame in 1976, and the U.S. Olympic Hall of Fame in 1984. He is also in the National Distance Running Hall of Fame, the Kansas Hall of Fame, the South Dakota Hall of Fame, the San Diego Hall of Fame, and the National High School Hall of Fame.
Billy Mills is the subject of the 1984 film Running Brave, starring Robby Benson.
Mills also serves as the spokesperson for Running Strong for American Indian Youth, an organization that helps support projects that benefit the American Indian people, especially the youth.