Díaz was born in the town of Cerro Verá east of Pirayú in the department of Paraguarí.

He became the police chief in Asunción and first distinguished himself on raids across the Río Paraná at Corrientes in the spring of 1866 during the Paraguayan War.

Díaz was the hero of the September 22, 1866 battle of Curupaity, leading a humiliating defeat of the allied forces.

Barely four months later, however, on 26 January 1867, a Brazilian shell exploded over general Diaz's canoe while he was fishing in the River Paraguay, outside the camp at Curupayty.

After his death, his coffin was brought to Asunción, where the town accompanied it to its resting place in the Recoleta neighborhood.