A social worker, Grace Powell brought Diego to live with Courtney Matthews in the fall of 2004. When Courtney decided to become a foster mother, she didn't anticipate 17-year-old Diego. Diego made it no secret that he was attracted to Courtney, which forced her to make it clear to Diego that nothing would ever come of his feelings for her.

Brook Lynn Ashton met the troubled Diego when the teen, came to blows with her friend Lucas Jones! Furious at her mother Lois for dating arms dealer Lorenzo Alcazar, Brooke decided to get back at her by pretending to be attracted to troublemaker, Diego who had ambitions of becoming a mob enforcer for Sonny Corinthos. When Diego saved Brooke from a warehouse bomb, Brooke started to look a little more closely at Diego, realizing he wasn't just a "bad boy" after all.

Diego hovered around the local Port Charles mob scene until events sprang up that led Diego to believe he had legitimate ties to a specific local mobster -- Sonny Corinthos. The discovery of some mysterious letters prompted Diego to run away to Mexico in search of his long-lost sister, Maria. With Brook Lynn, her uncle Dillon, and his girlfriend Georgie in tow, Diego was warned by his sister to stay out of Port Charles. He refused to give up his quest and returned to Port Charles, convinced his father was Sonny Corinthos. Dillon uncovered the truth when he matched Maria's necklace to the design of Lorenzo Alcazar's corporate logo.

It was soon revealed that Maria had at one time been involved with Lorenzo Alcazar, but she had a drug problem that Lorenzo wanted nothing to do with. Although she claimed to be clean, Lorenzo was suspicious one day when Maria slipped away. He followed her into an alley and was promptly shot by his enemies. Maria, fearing he would think that she had set him up, fled and went into hiding. She soon discovered she was pregnant. She raised her son for the first 10 years, telling him that she was his sister in order to protect him from what she believed would be Lorenzo's wrath should he discover her. She later put him into foster care when she was deported.

Brook encouraged Diego to formulate a relationship with Lorenzo, but Brook grew upset with the changes she saw in Diego. Their relationship fizzled, but Brook still had feelings for Diego until she saw he had feelings for Maxie Jones. Diego's dangerous side was revealed when, on separate occasions, Brook and Maxie were slipped date rape drugs, and nude pictures of Brook Lynn circulated. Diego admitted to being the stalker as a way to avenge Sage, his cousin, who was not treated nicely by the girls in Port Charles.

Diego was sent off to prison, but was released a few months later after snitching about another inmate's murder plot. During his time in prison, Diego maintained letter contact with Georgie Jones, and soon fancied himself in love with her, despite her recent marriage to Dillon Quartermaine.

After being released, Diego soon found himself the target of Manny Ruiz, who had been an associate of the man Diego had been in prison with. Manny went after Diego, but it was cop Jesse Beaudry who paid with his life. When Manny was dispatched shortly after, Diego paired up with Lulu Spencer, who wanted Dillon as much as he wanted Georgie, to break up the young marrieds. Although their plan succeeded, Diego never got anywhere with Georgie, who remained in love with Dillon even after their marriage broke up. Diego soon became determined to prove to his father that he could be a valuable part of his organization, and his first major job came when his father enlisted him to take out Sam and Jason. Unfortunately for Diego, Sam was a quicker shot. When he trained his gun on her and Jason, she shot first, and Diego died within seconds.

Or so everyone believed.

In September of 2007, Leticia Juarez, the Corinthos' children's nanny, was found strangled to death in Carly's home. Anthony Zacchara, a mobster out of New York City, was originally a suspect. Suspicion shifted to his son Johnny when Carly began receiving text messages from the killer, taunting her. Recklessly, Carly made plans to meet the Text Message Killer at the Black and White ball being hosted on Spoon Island. He made an attempt on Carly's life but in the end, it was Emily Quartermaine who died at the hands of the Text Message Killer that night. A few weeks later, Georgie Jones was found strangled to death in the park. By this time it became clear to all that there was a serial killer on the loose. Sam McCall, Alexis Davis and Maxie Jones all received text messages and had attempts made on their lives. No one was safe.

One night, Sam McCall had a bitter argument with her lover, Lucky Spencer. He threw her out and she wound up on the docks receiving text messages from the killer. Sam was attacked moments later. She struggled violently with the killer, and in a desperate attempt to get, Sam ran out into the street and was struck by a car and thrown several feet.

After a slow recovery in the hospital, Sam returned home to her penthouse where the Text Message Killer was laying in wait. Once again Sam struggled but was quickly overpowered by the killer who revealed himself. It was Diego Alcazar!

Diego was quick to share the details of his "demise' with Sam. He told her that as his father held his son's body, crying out in pain and vowing vengeance, he felt a faint pulse. Realizing he had to act quickly, Lorenzo insisted on taking his son's body to South America for burial. Lorenzo then arranged for a surgeon from nearby Mercy Hospital to disappear. He paid the man handsomely save his son's life and later brought the surgeon's family to South America to join him. Diego recovered. His last contact with his father was the night Lorenzo was murdered. He was about to leave Port Charles and join Diego at the family compound with Lila Rae, Diego's sister, and Skye. Lorenzo sent Diego a text message reading "I am coming for you".

Lorenzo's murder changed everything, Feeling alone and grieving deeply, Diego wanted Jason and Sonny to experience the same loss and pain. Killing them wasn't enough. They didn't fear death so Diego decided to take those close to them, and he wanted his victims to know they were going to die. He told Sam his reasoning behind killing each of his victims, and Sam realized her fate. She began to struggle with renewed energy but her injuries made it impossible to overpower Diego. He quickly subdued her and took her to his hideout. Later, Diego returned to Sam's apartment to make it appear as if she decided to leave town. As he was leaving he found Elizabeth Webber on Sam's doorstep ready to knock. Realizing that he was the Text Message Killer, Elizabeth tried to flee. Diego caught her before she got too far and dragged her into the apartment where he used chloroform and then hand cuffed her in the backseat of his car. Just then Max Giambetti, sent by Jason, came along. Seeing Elizabeth Webber unconscious in the backseat, Max pulled out his gun. Diego did as well and the two briefly exchanged gunfire. Diego managed to get inside his car and run Max down as he made his getaway. Max was banged up but otherwise ok. He called Jason as Diego fled to his hideout. As he was driving, Elizabeth came to. She quickly took action, ripping his ski mask off and then fighting him until he crashed. Unfortunately the car came to a halt on the side of a bridge. As it balanced precariously, Elizabeth managed to free herself.

Meanwhile, Nikolas remembered whose face he had seen with Emily the night she had died. Nikolas took his friend, Nadine, with him to the warehouse where Diego had supposedly been killed by Sam years earlier. Nikolas and Nadine argued before Nikolas stormed off and left Nadine alone in the warehouse. Diego kidnapped Nadine and set bombs to explode all around. When Nikolas returned, Diego attacked him and started to strangle Nikolas. Diego left before Nikolas was dead, though, and Emily came to Nikolas in a vision and told him to avenge her death. Nikolas found Diego ready to strangle Spinelli and Maxie, and a fight ensued. A rope got caught around Diego's neck during the brawl, which caused Diego to accidentally hang himself to death after he fell from the platform.