Diogo was the eldest son of John, Lord of Reguengos de Monsaraz, Infante of Portugal, and of his wife (and niece) Isabella of Barcelos.

These appointments were contested by Diogo's half-uncle (and grandfather), Afonso, Count of Barcelos.

Afonso had married the daughter of the late beatified constable Nuno Álvares Pereira, and believed their son, Afonso of Ourem, had superior rights to succeed as Constable of Portugal.

Peter of Coimbra challenged Barcelos and Ourem to provide documentary proof of the legitimacy of this lineage (which they were unable to produce).

Peter of Coimbra attempted to mollify them by creating the title of Duke of Braganza, and investing it in Afonso of Barcelos.