At the death of Valdivia at the hands of the Mapuches at the Battle of Tucapel, the citizens of southern Chile followed the instructions of his will and announced Francisco de Villagra as their leader.

Castilla had orders to arrest Pedro de Villagra (the uncle of Francisco who had risen to the post of governor while protected by the previous Viceroy), and put Quiroga in his place.

He accomplished the conquest of the island of Chiloé, sending his Lieutenant Governor Martín Ruiz de Gamboa to establish the city of Castro there, and pacifying its inhabitants, the docile Cuncos.

In addition to the ongoing war of Arauco, there were incursions by pirates, two earthquakes (in 1575) and a dispute with the bishop of San Miguel over the naming of ecclesiastical posts and the reduction of the income of the clerics, which put him in danger of excommunication.

Overcoming these difficulties and his sickness (he had to be carried by chair to the battlefield), Quiroga launched a new offensive against the Mapuches, this time led by their toqui the mestizo Alonso Díaz.

Drake managed to sack the port of Valparaíso, but when he tried to repeat the action at La Serena, he encountered the armed resistance of the inhabitants, and was repulsed.

Quiroga's grave sickness impeded him from continuing to direct the war, and he handed the task over to his son-in-law Martín Ruiz de Gamboa.

Prostrated in his bed by his pain, in his last days he dedicated himself to religious observance, circled by monks to whose monasteries he would give a majority of his goods.