 Born in La Ceiba, he played for Victoria and Olimpia in Honduras before moving to England, where he played for Birmingham City and Wigan Athletic.In 2009, he joined Tottenham Hotspur, generally playing central defensive midfield as he did for Wigan, though he was occasionally used as a right midfielder for Spurs.In August 2011, Palacios joined Stoke City for an undisclosed fee believed to be around £6 million.