Zaragoza was born in la Bahía del Espíritu Santo, in what was then the Mexican state of Coahuila y Tejas, now the city of Goliad, Texas, in the United States. The Zaragoza family moved to Matamoros in 1834 and then to Monterrey in 1844, where young Ignacio entered the seminary.

During Mexico's political unrest of the 1850s, Zaragoza joined the army supporting the cause of Mexico's Liberal Party, opposing dictator Antonio Lopez de Santa Anna. He commanded an army of volunteers in 1855 that defeated Santa Anna and led to the reestablishment of a constitutional democratic government in Mexico.

Zaragoza served as Secretary of War from April through October 1861 in the cabinet of President Benito Juárez. He resigned in order to lead the Mexican Army of the East against the Europeans who, using the Mexican external debt as a pretext under the Treaty of London (1861), had invaded Mexico.

When the French forces of Napoleon III invaded Mexico in the French intervention in Mexico, Zaragoza's forces fought them first at Acultzingo on April 28, 1862 where he was forced to withdraw. Zaragoza understood the favorable defensive positions outside of the city of Puebla, and with a force that was smaller and not as well equipped as his opponent, he beat back repeated French assaults upon the Mexican positions at Forts Loreto and Guadalupe. The French were forced to retreat to Orizaba.

His famous quote Las armas nacionales se han cubierto de gloria (The national arms have been covered with glory) is used to remember the battle, and comes from the one-line letter he wrote to his superior, President Juárez, to inform him of the victory. 

Shortly after his famous victory, he contracted malaria, and died at the age of thirty-three.