Illusion will change the appearance of the Pokémon to a different species. This is dependent on the last Pokémon in the player's party, meaning that Illusion will not activate if the last Pokémon in the player's party is unable to battle or is of the same species. Illusion will replicate the type of Poké Ball, species name, Shininess (if any), and gender of the Pokémon it is masquerading as; however, it does not replicate the level of the masqueraded Pokémon. The effect is only aesthetic: it does not affect the Pokémon's stats, typing, moves, etc.
A Pokémon with Illusion can masquerade as another Pokémon with Illusion, provided that they are different species.
Outside of battle
Illusion has no effect outside of battle.
Pokémon Mystery Dungeon
In Pokémon Mystery Dungeon: Gates to Infinity, the Ability functions similar to the main series games for foe Pokémon. A Pokémon with this Ability can transform into another Pokémon that can be found on the same floor of a mystery dungeon. For partner Pokémon, this Ability becomes nonexistent.
Zoroark's eyes glow light blue and its outlines start to glow pink. Then, a magenta wave of energy appears by its face and moves down to its feet. As the wave moves down, its body changes its shape into the opponent, or Zoroark's eyes glow red and it causes the opponent to see illusions of its choosing.
Zorua's eyes glow light blue and it jumps up high into the air, spinning its body while in the air. As it spins, its body starts to glow pink and it changes its shape into the opponent. As a human, its tail is sometimes visible, and when the tail is pushed, pulled, or grabbed, Zorua instantly returns to its normal form. Sometimes, its eyes don't glow light blue before it spins.
Zorua changes its appearance into something else, occasionally retaining its eyes, eyebrows, and eyelids when it does so. If Zorua takes damage, it takes a wisp-like appearance as it is forced out of its transformation.