Littbarski spent most of his playing career at 1. FC Köln, winning the DFB-Pokal once, in 1983, and was three times runner up in the Bundesliga (1982, 1989 and 1990). He has also played for RC Paris in Ligue 1 as well as for JEF United and Brummel Sendai in Japan. In his career, he was initially used as a deep-lying striker before being utilised as an attacking midfielder. "Litti", as he was nicknamed by German fans, was widely known for his excellent dribbling abilities and humorous attitude, being one of the fan favourites in German Bundesliga during this decade. In 1985 his goal versus Werder Bremen was elected "Goal of the Year".
Littbarski had a prolific but short career as part of the West German Under-21 side. He was a part of the squad that got to the 1982 UEFA European Under-21 Football Championship final. The team lost to England 5–4 after a two-leg final (losing 1–3 away and winning 3–2 at home). Littbarski scored a hattrick against the English in Germany, but ultimately they lost the tie.
Littbarski earned his first cap for West Germany on 14 October 1981 in the 1982 World Cup qualification against Austria. West Germany manager Jupp Derwall started him in a three-man front line alongside Klaus Fischer and Karl-Heinz Rummenigge. Littbarski's international career got off to a promising start, as he scored both the opening and the second goals in that game. His third international goal came at the 1982 World Cup, in the second round match against Spain, a 2–1 victory. Against France in the semi-final, Littbarski scored the opening goal and, later, on a penalty kick in the deciding post-overtime shoot-out. The now legendary match ended in a 3–3 draw. Littbarski was also involved in the dramatic equalizer, crossing to Horst Hrubesch, who headed to Fischer, who in turn scored with an overhead bicycle kick. A poignant scene in the penalty shooutout showed the young Littbarski consoling a tearful Uli Stielike who missed a penalty, burying his head in Littbarski's shirt, as West Germany's goalkeeper, Schumacher saved Dider Six's penalty to even ths score, with the Germans eventually winning 5–4 on penalties. West Germany lost 3–1 to Italy in the final. Littbarski played the whole match, receiving a yellow card in the 88th minute.
At the UEFA Euro 1984, West Germany, with Littbarski, were eliminated in the group stage after a string of poor performances. The 1986 FIFA World Cup in Mexico, while successful for West Germany, proved less so for Littbarski personally. He was benched by manager Franz Beckenbauer, and had to watch the semi–finals and the finals from the bench. Eventually, West Germany finished again as runners–up, this time losing 3–2 to Argentina. In 1987, he played in a notable match against England and scored two goals, one directly from a corner, as the Germans won 3–1.
The German players had high hopes for the UEFA Euro 1988 on their home soil. However, the hosts lost 2–1 to the Netherlands in the semi–finals. Littbarski did not score any goals in the tournament. In 1990, Littbarski enjoyed a successful final appearance at the FIFA World Cup, as West Germany won their third title, defeating Argentina 1–0 in the final in Rome. Littbarski scored his only goal in the group stage against Colombia but started three of the four games at the knockout stage, including the final.
He was famous amongst Sydney FC supporters and the media for his stylish brown suits. Sydney under Littbarski were criticised for boring football, but the results could seldom be argued with and Sydney FC went on to claim the inaugural A-League Championship under his reign. Littbarski and Sydney FC severed ties on Wednesday, 5 May 2006, with Littbarski announcing he would not re-sign for the club following disputes over a cut-price contract offer.
In December 2006, Littbarski was appointed the manager of Avispa Fukuoka, a J-League side that was newly demoted to the second division after the 2006 season. In July 2008, he left the club and was replaced by Yoshiyuki Shinoda.