Diego began his career at Santos, where he won two Campeonato Brasileiro Série A titles before moving to Porto in 2004.

After two seasons, he moved for €6 million to Werder Bremen where his form improved, winning domestic honours and helping them to the 2009 UEFA Cup Final.

He was part of the Brazilian squads which finished as runners-up at the 2003 CONCACAF Gold Cup, won the Copa América in 2004 and 2007, and earned a bronze medal at the 2008 Olympics.

After joining another team, São Carlos, when he was nine, Diego decided to take trials in the hope of impressing a bigger club.

Diego was then signed by Primeira Liga club Porto in July 2004 as a replacement and the potential successor for Deco, but he could not produce the same calibre of performances as he did at Santos.

As Porto triumphed in the Intercontinental Cup against Once Caldas via a penalty shootout, Diego was sent off for swearing at goalkeeper Juan Carlos Henao after scoring his effort.

Journalist Tim Vickery ascribed this action to Diego's experiences against the team in the previous season's Copa Libertadores, in which the physical Colombian side eliminated Santos in the quarter-finals.

In May 2006, Diego signed a contract with German Bundesliga side Werder Bremen until 2010 for a transfer fee of €6 million.

[5] As the Bundesliga season progressed, Diego made several amazing performances and became one of the most valuable players for Bremen, along with his teammate Torsten Frings.

Without Diego in the 2009 UEFA Cup Final, Bremen lost the game 2–1 in extra time to Ukrainian team Shakhtar Donetsk.

[12] Diego's swaggering displays he produced during his time in Bremen were met with anger and confusion from Juventus fans; the formation did not suit him and he had a fall-out with then coach Ciro Ferrara.

On 5 February 2011, he won a penalty for Wolfsburg; he subsequently took the ball from designated spot-kick taker Patrick Helmes, then hit the woodwork ten minutes from time.

[27] On 9 May 2012, Diego scored the third goal on Atlético's win over Athletic Bilbao in the Europa League Final, assuring the capital side won the title for the second time in three years.

"[29] Atlético teammate Juanfran revealed that Diego wanted to stay at Madrid rather than go back to Germany, but confessed that it would be tough for the club to buy him outright.

[38] Following the match, Diego stated that the club are enjoying their football again and he had given a chance under new interim manager Lorenz-Günther Köstner.

[39][40] Four days later, in the DFB-Pokal, Diego opened the scoring before providing an assist for Bas Dost as Wolfsburg defeated FSV Frankfurt 2–0.

Before and during the 2013–14 Bundesliga season, Diego was linked with a move back to Santos in Brazil,[44] as well as with English Premier League side Arsenal.

Throughout the first half of the season, however, Diego's future at Wolfsburg was uncertain after he disagreed with sporting director Klaus Allofs.

[50] Diego debuted on 2 February on Atlético's victory 4–0 against Real Sociedad, scoring the match's fourth and final goal.

[51] On 1 April, Diego scored from a long-range shot against Barcelona in the Champions League,[52] as Atlético reached the semi-finals for the first time since 1974.

[53] Nevertheless, Diego helped the club win the La Liga championship to earn his team its first league title in 18 years.

[54] After being linked a move away, Diego wrote on his Instagram account, giving the Atlético supporters a farewell message, as he left the club for the second time.

[58] Diego made his Fenerbahçe debut in the opening game of the season, coming on as a substitute for Emmanuel Emenike in the 62nd minute, in a 3–2 win over Karabükspor.

[59] Diego continued to be in the first team by the first half of the season until he suffered a partial muscle tear during a 1–1 draw against Bursaspor on 24 November 2014.

[60] After being on the sidelines for three weeks, Diego made his first team return against Altınordu in the Groupstage of Turkish Cup, which he scored in a 1–1 draw on 23 December 2014.

[64] Diego scored his first league goal for the club in a 4–3 win over Balıkesirspor on 2 May 2015[65] after making his first team from the previous game as a substitute.

Specifically, Werder Bremen (to send Diego) along with Schalke 04 (Rafinha), both to Brazil, and Barcelona (Lionel Messi) to Argentina, did not want to release their players for the Olympic games so that they could help them in their domestic and European competitions.

[80][81] Schalke, Werder Bremen and Barcelona, however, took their case to the Court of Arbitration for Sport (CAS) who eventually ruled in the clubs' favour, stating, "The Court of Arbitration for Sport (CAS) has upheld the appeals filed by FC Schalke 04, SV Werder Bremen and FC Barcelona against the decision issued on 30 July 2008 by the Single Judge of the FIFA's Players' Status Committee that consequently has been set aside in its entirety because the Olympics is not on the FIFA's International Calendar to avoid competing with the World Cup.

"[82][83][84][85] Despite his club's wishes, however, he ultimately did compete for the Brazil squad under the provision that their salaries were paid for by the Brazilian Football Confederation,[86] which won bronze.

Diego was a creative offensive playmaker known for his technique, dribbling ability, vision and accurate passing; usually deployed as an attacking midfielder, he was also capable of playing as a supporting forward or on the wing on occasion.