In 1975, Henson moved to the University of Illinois to replace Gene Bartow, after Bartow left Illinois to replace John Wooden at UCLA. In 21 years at Illinois, Henson garnered 423 wins and 224 losses (.654 winning percentage), and with a record of 214 wins and 164 losses (.567) in Big Ten Conference games. The 214 wins in Big Ten games were the third highest total ever at the time of his retirement. His best Fighting Illini team was the 1988-89 unit, which won a then-school record 31 games and went to the Final Four. At Illinois, Henson coached many future NBA players, including Eddie Johnson, Derek Harper, Ken Norman, Nick Anderson, Kendall Gill, Kenny Battle, Marcus Liberty, Steve Bardo, and Kiwane Garris, and was known for his trademark Lou-Do. Henson retired from Illinois at the end of the 1996-1997 season.