Zinedine Zidane's men had equaled the previous best of 16, set by Barcelona, in their previous match against Espanyol, but a 1-1 draw at the Bernabeu Wednesday put an end to its hopes of extending that run.
The draw puts Real two points clear of Sevilla at the top of La Liga, after Barcelona drew with Atletico Madrid at the Nou Camp to remain three points behind.
"We did not start the game well," Zidane told Real Madrid TV. "The second half we had many chances, but you cannot always win in the last minute.
"More work is needed at the beginning of the game. It's a shame not to break the record.
"I want a draw (between Barcelona and Atletico), so we will all stay same. But really I'm not worried about that result, just my team."
While Real has become synonymous with individual Galacticos over the years, coach Zinedine Zidane has demanded a collective team effort, ordering his players to "run more" in the wake of a defeat to its Madrid rival Atletico -- the last match before the 16-game streak began.
Attacking flair has often been quelled with the Frenchman favoring a more pragmatic approach, as the hard-working defensive midfielder Casemiro has provided balance to a sometimes top-heavy team.
This new work ethic was evident in the opening 45 minutes against Villarreal. The visiting team, understandably, adopted a reserved approach with unwavering commitment to its defensive duties.
But Real matched its opponents stride for stride.
The home side, unsurprisingly, started the match on the front foot, bombarding the Villarreal defense with corner after corner, but the 'Yellow Submarine' stood firm to ride out the wave of early pressure.
The game's first real chance came just shy of the 20-minute mark. Marcelo's deep cross into the box was headed back across goal by Gareth Bale, but keeper Sergio Asenjo was on hand to acrobatically deny Karim Benzema.
Just under 10 minutes later, Villarreal had its first sight of goal. Forward Denis Cheryshev latched onto the end of a deft flick from Samu Castillejo, before firing towards the top corner, only to find the outstretched palm of Kiko Casilla in his way.
Cheryshev, you might remember, inadvertently knocked Real out of last season's Copa del Rey
, after then manager Rafael Benitez fielded the Russian in a tie against Cadiz, only to later discover he was ineligible.
With just a minute remaining before half time, Villarreal had a golden chance to take the lead. With Marcelo off the pitch receiving treatment, Nicola Sansone found himself clear through on goal.
Several seemingly unnecessary step-overs allowed Raphael Varane to get back and make a challenge, before the ball broke to Cheryshev but his weak effort was blocked into the hands of Casilla.
Villarreal must have thought its best chance of the half had come and gone, but up stepped Sergio Ramos.
The Real Madrid captain deliberately stuck an arm in the air to block a goal-bound shot and proceeded to pretend as though the ball had struck him in the face.
An Oscar-worthy display in Real's last game against Espanyol saw him employ the same tactics to get away with another handball, but he wasn't acting his way out of this one.
Captain Bruno stepped up to take the penalty and his impudent chip down the middle of the goal sent Casilla the wrong way, ensuring Villarreal took a shock, but deserved lead going into half time.
While Zidane isn't known for losing his temper as a manager, whatever he said at half-time had the desired effect.
His side came out after the break with a renewed energy and the bombardment of Villarreal's goal soon commenced.
Before the half was even three minutes old, Real found the equalizer. Ramos rose high at the far post to head home James Rodriguez's corner and atone for his earlier costly error.
And the barrage showed no signs of subsiding, as a minute later Benzema got his head onto Mateo Kovacic's chipped ball into the box, but could only look on as it floated inches wide.
Real Madrid was unrelenting and carved out yet another chance just after the hour mark.
Brilliant interplay saw Bale play Dani Carvajal in down the right and his low cross across the six-yard box missed Ronaldo's toes by a whisker.
Substitute Alvaro Morata, on for Benzema, headed another Carvajal cross into the turf to draw an acrobatic save out of Asenjo.
Real continued to press and Ronaldo squandered his side's best chance, firing a shot straight into Asenjo's grateful arms when in space inside the 18-yard box.
Despite the disappointment of being unable to extend its winning run, Real maintains its unbeaten start to the season and extends its lead over second place Sevilla to two points.
Barcelona missed the chance to close the gap to just one point after its draw with Atletico.
The Catalan club was dealt a further blow with the news Lionel Messi would be out of action for three weeks with a groin injury, after limping out of the clash at the Nou Camp.