Dinamo last reached this part of the competition back in 1999 having seen their participation in each of the last five seasons ended at the third qualifying round.
The Croatian champions have now got that monkey off their backs, beating Malmo in the play-offs, and their reward was to be drawn in Group D alongside European heavyweights Madrid, Ajax and Lyon.
Dinamo are outsiders for one of the top two spots, but Madrid are determined not to take them lightly ahead of their trip to the Maksimir stadium.
Assistant coach Aitor Karanka, who took tonight's pre-match conference in place of the suspended Jose Mourinho, said: "They are a difficult team and we would be mistaken if we think they are a weak opponent.
"It's been several years since they've been in the group stage and in front of their fans they are going to create a lot of problems for us. We will have to work hard if we want to get something positive out of the game."
Madrid midfielder Xabi Alonso added: "We are expecting a difficult game because they have good players.
"We are in the group stages and any opponent is difficult. After so many years without playing in the Champions League this match will be an incentive for Dinamo Zagreb."
Madrid reached the semi-finals of last season's Champions League - having been knocked out at the last-16 stage in each of the previous six years - before being eliminated by arch rivals Barcelona in an ill-tempered showdown.
The actions and comments made by Mourinho during the first leg of that tie led to UEFA handing the Portuguese a touchline ban, and he will serve the second of a three-match suspension on Wednesday.
Dinamo coach Krunoslav Jurcic believes that will be a plus for his side.
He was quoted as saying by AS: "The absence of Mourinho could make a difference because he has a lot of influence in the team. Mourinho is a leader, and leaders are difficult to replace."
Even without Mourinho, Madrid are favourites, but Jurcic will not be taking a step back and insists he will send his side out looking for the victory.
"It would go against all my principles as a coach to think of anything other than the victory and my players will be thinking of how to get the better of the Real Madrid players and not with whom they are going to swap shirts with after the game," he said.
"I don't need to motivate my players for a game like this, they want the game to start and all I can tell them is to go out and enjoy it."
Dinamo go into the match having dropped their first points of their domestic campaign at the weekend, drawing 1-1 at Hajduk Split.
Despite that, Dinamo are still top of the standings with 19 points from a possible 21 - five clear of second-placed Hajduk.
Defensive duo Josip Simunic and Sime Vrsaljko are both suspended while Igor Biscan, Arijan Ademi and Mehmed Alispahic have all been sidelined with injuries.
Madrid are without Kaka through injury, while summer signings Hamit Altintop and Nuri Sahin are also unfit and not part of a 21-man travelling squad. Sami Khedira and Lassana Diarra both return.