The marquisate was created by the queen Isabella I of Castile to reward Enrique Pérez de Guzmán, 2nd Duke of Medina Sidonia.
The Duke of Medina Sidonia had been recognized his rights and powers over the town of Gibraltar and its Campo by Isabella upon the death of Henry IV, her predecessor.
In Andalucía, the most powerful and rival families were the Guzmans (the Dukes of Medina Sidonia) and the Ponce de Leons (the Counts of Arcos).
Rodrigo Ponce de León had been rewarded in 1471 by Henry IV with the Marquisate of Cádiz for his participation in the capture of Gibraltar in 1462.
In order to balance the awards granted to the noble families, Isabella of Castile issued on September 30, 1478, a letters patent naming the Duke of Medina Sidonia, Marquis of Gibraltar.