Don Diego de la Vega, son of Don Alejandro de la Vega was born in 1788 (Don is a title in Italian and Spanish meaning "Honorable"). While studying in Madrid at University, he was gifted a sword by his sabre master, Sir Edmund Kendall.He had actually learned fencing techniques while aboard the ship carrying him from California to Madrid, which allowed him to surpass his teacher. Upon being summoned home by his father, Diego learns of what the pueblo (village in Spanish) is facing and the true reason his father wanted him to take fencing lessons from Sir Kendall.

Despite learning these skills as a swordsman, Diego decided to appear as a bookish, Spanish gentleman. One night, his servant and friend shows him animal in a secret cave. This animal (which turns out to be a fox) gives Diego an idea. During this time he also learns Felipe can hear (previously having thought he couldn't). Using the element of the fox, Diego creates an identity, El Zorro (The Fox in Spanish). His reason for developing this new creation is to fight the injustice done to the innocent people of the pueblo of Los Angeles.

The Alcade (Mayor in Spanish) of the pueblo rules with an iron fist and often times down right tyranny. Multiple encounters with the Alcade results a cat and mouse game between the two men. Meanwhile, no one (including Don Alejandro) in the pueblo realizes Don Diego and Zorro are the same man. Tavern owner Victoria Escalente falls in love with the masked man, Zorro, but not Don Diego.