Korea's Hwang Inn-Choon was among the 10 players at 4-under 68, leading the home charge at the first European Tour event staged in his country.
Paul McGinley, Graeme McDowell, Jeev Milkha Singh, Jyoti Randhawa, Simon Griffiths, Scott Hend, Shingo Katayama, Anthony Kim and Prayad Marksaeng were also a shot back.
Eleven players were tied at 3-under 69, and there were 77 total at even-par or better after the first round at Pinx Golf Club, including Chris DiMarco (70), Padraig Harrington (71) and K.J. Choi (71).
Ilonen grabbed the early lead with a nearly spotless 67 in his morning threesome, beginning the round with two birdies on his first three holes.
He added a birdie at the sixth, dropped his only shot with a bogey at the seventh, then finished the front nine with a birdie at the ninth to make the turn at 3 under.
'I got off to a quick start, birdie on the first and good opportunity on the second and made one on the third again, so I was quickly three under,' said Ilonen.
'Then, probably the second toughest hole on the front nine I made a bogey, into the wind, a long hole, the par four. All in all I played solid.'
Ilonen, a two-time winner last season, added birdies at the 10th and 12th before finishing with six consecutive pars. It was the best round he has played for a while, he said.
'I've made a lot of cuts, but I haven't really played that well,' said Ilonen, a 28-year-old Finn. 'I've been kind of building on something and it's getting a little bit better all the time.'
Carolan posted his bogey-free 67 in an afternoon group to join Ilonen in the lead. He strung together three straight birdies from the second hole, then made a birdie at the ninth to pull within one.
Six consecutive pars gave way to his last birdie of the day, at the 16th.
Carolan replaced his caddie during the round, a local man who was jiggling clubs while the players putted an whose spikes prevented him from stepping onto the green
'I don't think I have ever sacked a caddie during a round before, but I think I've been sacked by a caddie,' joked Carolan, a 39-year-old Australian who has never won on the European Tour. 'It was an eventful day but I'm delighted with the score -- hopefully we can keep it going tomorrow.'