Diego de Escobar y Osorio was born in the Captaincy General of Chile, part of the Viceroyalty of Peru.
He attained the rank of Maestre de Campo , and became an oidor (judge) of the Real Audiencia of Charcas.
[2] On his journey there, he met in Corrientes Bernardino de Cárdenas, the deposed Bishop of Asunción.
Cárdenas had been involved in an acrimonious dispute with the Governor of Paraguay being replaced, Gregorio de Hinestrosa.
Using the Royal Decree of 1537, the Paraguayans elected Bishop Cárdenas as the replacement governor to succeed Osorio, setting up a clash of Paraguay against the Jesuit missions and the rest of the Spanish Empire.