Portsmouth announced on 17 December 2008 that they had accepted a "substantial" offer from Real Madrid for Diarra's services and £20 million transfer was agreed five days later. He was assigned 6, the shirt number of Mahamadou Diarra for domestic competitions as the Malian midfielder would be out with a season-ending injury. He will, therefore, wear the name "Lass" on the back of his shirt to avoid comparison. His transfer was officially completed on 1 January 2009, the opening of the transfer window. He was assigned with the number 39 for the Champions League. He was then given the number 10 shirt after Wesley Sneijder moved to Inter Milan and his namesake Mahamadou came back from injury.

Diarra's performance for Real Madrid in his first few months earned him a spot among the starting eleven on UEFA's 2008/09 La Liga Breakthrough Team. The Madrisista joins Sevilla's Perotti as the only foreigner on the list. According to the UEFA website, Lass "joined Real Madrid in the winter transfer window with a very low profile, although in a few short months he managed to convince the demanding Madridista fan base. His physical strength allows him to take position in any spot on the pitch to make up for any defensive mismatch, and he proved to have great ball control, which allows him to act as a great assistman for his teammates."

Diarra scored his first official goal for Real in the 2009-2010 La Liga season opener against Deportivo, providing his side with the game-winning goal in a 3-2 win. Diarra became one of the most important players of Real Madrid, some people already consider him "the new Makélélé".