The first explicit reference to the foundation of the Biscayan lordship is in the Livro de Linhagens, written between 1323 and 1344 by Pedro Afonso, Count of Barcelos.

The book narrates the arrival in Biscay of a man named Froom, a brother of the King of England, who had expelled him from his kingdom.

[1] A notable story among these accounts, which bears some resemblance to the Melusine legend, is that of the Lady of Biscay (La Dama de Viscaya), a beautiful stranger found in the countryside by Lord Diego López.

In this story, a man named Çuria is born from the union of the god Sugaar and a Scottish (or in other versions, Irish, Danish or Frankish) princess in the village of Mundaka.

Tradition holds that before the battle he saw two wolves carrying lambs in their mouths, presaging the victory; this scene is reflected in the arms of the lords of Biscay of the House of Haro.

García de Salazar proceeds to give Çuria two sons by different mothers, Munso López (perhaps representing the historical Munio Velaz of the early 10th century) and Ínigo Esquira (an onomastic twin of 'Enheguez Guerra' from the line given by the Count of Barcelos, the byname apparently akin to the Basque ezker and ezkerti – 'left' and 'left handed' respectively[1]), who are followed by further apocryphal lords, Lope Díaz and Sancho López, before García de Salazar names a second Ínigo Esquira, this time representing the first authentic Lord of Biscay, the 11th-century Íñigo López.

This tale of Çuria would further develop into the legend of Jaun Zuria (the White Lord) of Biscay, treated as a historical figure perhaps identical to Froom by 19th century historians.

Count Íñigo López, lord of Biscay surrendering the fortress of Bilibio to the Leonese, which aided in their conquest of La Rioja.

[8] The lordship would be later inherited by his son, Diego López I de Haro, who served as Lord of Biscay until 1134 when he was defeated and probably killed by Alfonso the Battler, King of Aragón and Navarre.

The Lordship was then reintegrated into Navarre and Ladrón Íñiguez, one of the most powerful men of the Navarrese court, was named Lord of Biscay.

During that time, Lope Díaz I de Haro claimed the title of Lord of Biscay, though he never set foot on the land during his lifetime.

The Lordship of Biscay was in the hands of the Haro family and their descendants through 1370, when it passed to prince Juan of Castile, a distant kinsman with a maternal descent from the earlier Lords.

They were the towns of Balmaseda, Bermeo, Bilbao, Durango, Ermua, Gernika, Lanestosa, Lekeitio, Markina, Ondarroa, Otxandio, Portugalete, Plentzia, Mungia, Areatza, Errigoiti, Larrabetzu, Gerrikaitz, Miraballes, Elorrio and Urduña.

The region known as Enkarterri (Encartaciones in Spanish) is located at the west of the River Nervión and was incorporated into the Lordship in the 13th century by the House of Haro.

The Merindad of Durango comprised the following elizates: Abadiño, Berriz, Mallabia, Mañaria, Iurreta, Garai, Zaldibar, Arratzola, Axpe, Atxondo, Izurtza and Elorrio.

Its function was to govern the Juntas Generales, the Diputación had competences in military and financial issues, as well as the maintenance of the roads and charities.