Ian started his career at Coventry City but his 90 appearances were not often in his preferred position as centre half. He was sold to Notts Forest in a joint move with Stuart Pearce. One half of this deal went on to captain England, the other to Carrow Road as Ian Butterworth joined Norwich in September 1986. Originally on loan, he transferred permanently two months later for £160,000. Since then, he was a regular in the centre of the City defence for the best part of eight years until knee injuries forced him to retire. An attempt to resurrect his career at King's Lynn failed and Ian moved to the USA to participate in the inaugural season of the Major League Soccer with the Colorado Rapids. Rumours have it that he had a trial with Stoke City during the 1996/97 season. Can anyone confirm this?

Ian restarted his career in Sweden with Braga and in September 1997 became their player manager. However The News of the World reported soon afterwards (on 19th October 1997) that Ian was seeking to resurrect his career in Britain and that he had arranged a trial with Third Division Peterborough. In November 1997, Ian played in a reserve team friendly for Darlington, managed by former Canary David Hodgson against Crook Town. Attempts to restart his career in English league football were unsuccessful and Ian joined Kevin Bond's Stafford Rangers of the Dr Martens Southern League. In the early part of 1998, Ian then moved to Ireland to become player manager of struggling Cobh Ramblers.

In May 1998, he joined Dave Hodgson's Darlington as Assistant Manager. They led Darlington to a Wembley appearance in the Division Two play-offs in 1999/2000 but in a shock move, Hodgson and Butterworth resigned from their jobs on 2nd July 2000, with Hodgson immediately replaced by Gary Bennett.

In October 2000, Ian was appointed as Number 2 to Alan Cork at Cardiff City and this partnership was successful as Cardiff gained promotion to Division Two in April 2001. As assistant to Lennie Lawrance, Ian helped Cardiff into Division One in May 2003.

On 3rd September 2004, Cardiff sacked Butterworth and finess coach Clive Goodyear. Bluebirds owner Sam Hammam said a change was needed to give manager Lennie Lawrence a "right-hand man who is a super coach, a bit of an animal". Hammam added: "Lennie is the right manager for Cardiff City, we will not change that. But maybe it's time to change things around." Early speculation linked former Wimbledon manager and current Watford coach Terry Burton with the role

Butterworth obtaining his pro licence Coaching Badge in 2005 which he took with Bristol Rovers manager Ian Atkins. Atkins then offered Butterworth a coaching role. It is initially unpaid with Atkins commenting "at least it gets him out of the house" !! Ian left Rovers when Atkins was sacked in September 2005. He then worked for the Football Association, including a stint at the World Cup in Germany 2006 before joining Hartlepool as Reserve Team Manager in early July 2006. "It's a fantastic appointment for the club," Pools boss Danny Wilson told his club's website."I am sure he is going to be a real asset for us. The fact that he has been to the World Cup helping the FA speaks volumes," he added

Following the appointment of Bryan Gunn as the new Norwich manager on 21st January 2009, it was reported that Butterworth might be lined up for a switch to Carrow Road as Gunn's assistant. This became a reality at the beginning of February 2009

Following Bryan Gunn's sacking on 14th August 2009, Butterworth was appointed caretaker manager and oversaw the 1-1 draw at Exeter and the 2-1 defeat at Brentford. With the appoitnment of Paul Lambert and Ian Culverhouse, Butterworth resigned on 19th August 2009 saying “Obviously things haven't worked out during my time here in difficult circumstances and I obviously felt the new coaching team wouldn't want me hanging about. Therefore I have taken the decision that it is right for all parties for me to move on."

In early October 2010, Butterworth was reported to have been interviewed for the vacant Lincoln City manager's position, available since Chris Sutton quit at the end of September 2010

Since leaving Norwich, Butterworth has helped his old Coventry and Forest teammate Stuart Pearce by scouting England Under-21's opponents. In June 2011, he was linked with the vacancy at Torquay.

On 14th June 2013, Butterworth joined QPR as Scouting Co-ordinator replacing Kevin Cruickshank. "“Everyone will be pulling together next season and my job will be to search for players, identify players, and then present them to Harry. “I have a team of scouts that I will need to organise. At the moment there are six or seven involved with the club who are based across the UK and some parts of Europe. We’ll be looking to put them in the right areas to cover the games and players that we want to see."

Butterworth and QPR returned to the Premiership on 24th May 2014 beating Derby in the Championship play-off final with Bobby Zamora scoring the vital goal.

They spent just one season in the Premier League, relegated on 10th May 2015 losing 6-0 to Manchester City. They finished bottom of the table.

In the summer of 2017, Butterworth moved to Burnley to become their new Head of European Recruitment.