In 1488 he was instructed by the Catholic monarchs, Ferdinand II of Aragon and Isabella I of Castile, to start an offensive against Grenada from Murcia, which he did with all the forces he could supply and won many victories, concluding with the capture of Baza and Huéscar.
He provided 250 lances and 300 foot soldiers, and with his uncle Martín Alfonso de Córdoba y Montemayor made the whole of the Alpujarras region fall to the Christian forces the next year.
Don Diego Fernández de Córdoba, count of Cabra, Viscount of Iznájar, lord of Baena is listed among those present in December 1491 in the Capitulations of Santa Fe.
On 11 June 1499 he was appointed joint viceroy and governor of Castile with Gómez Suárez de Figueroa, Count of Feria and father of his relative the Marquis of Priego to represent them during his visit to Andalusia.
[1] Diego was one of the three ambassadors to England that left on 26 August 1501 to accompany princess Catherine of Aragon (1485–1536) on her marriage to Arthur, Prince of Wales (1486–1502).