He played a decisive role in the rise of the Haro dynasty, as well as in the construction of the nobiliary identity of his group, who was to dominate the Castilian political society during the whole 13th century.

A publicity strife around this key figure between his successors and the monarchy, in a moment of deep political troubles, led to the elaboration of his dark image and his golden legend at the end of the 13th century, and the invention of his opposite nicknames.

The rise of his parents in the neighboring kingdom of León let him catch sight of better opportunities in 1187, when his sister Urraca López married King Fernando II.

In 1212, the king entrusted to him one of his three armies in the battle of Las Navas de Tolosa, that allowed the Christian kingdoms to get rid of the power of the Almohads in al-Andalus.

Diego López II strengthened the part of the head of family among his clan, permitting the shift from the "horizontal" conception of kinship to the "vertical" system of dynasty.

As soon as 1216, during the regency of the Lara brothers, when Lope Díaz II de Haro was trying to play a political role, the royal chancellery issued a charter judging him a bad lord.

The tombs of Diego López and of his wife Toda Pérez, in the cloister of knights of the abbey of Santa María de Nájera, were both realized during the second half of the 13th century.

During 1270–1280, when Lope Díaz III de Haro was brought against King Alfonso X of Castile-León, in nobiliary rebellions ever more open, intellectuals from the court denigrated the reputation of Diego López "said the Good", to whom the responsibility of the defeat of Alarcos was for the first time attributed.

Writers supporting the Haros invented in this period an equivalent myth to justify Diego López II's attitude and to charge the monarchy.