He was born at Carrión de los Condes in Old Castile to a noble family which figured prominently in the arts. His grandfather, Pedro González de Mendoza, and his father, Diego Hurtado de Mendoza Admiral of Castile, were both poets with close ties to the great literary figures of the time: Chancellor Lopez de Ayala, Fernán Pérez de Guzmán and Gomez Manrique. His mother, Doña Leonor de la Vega, was a wealthy heiress belonging to the House of de la Vega.

Lopez de Mendoza's father died when he was five years old, which brought his family into financial difficulties. Part of his childhood was spent living in his grandmother's household, and in the home of his uncle, the future Archbishop of Toledo. As a youth, he spent time in the court king Alfonso V of Aragón, where he was exposed to the work of poets in the Provençal, Valencia and Catalan traditions, the classic Humanist works of Virgil and Dante Alighieri, and the lyricism of troubadours such as Enrique de Villena.

In 1412, Don Íñigo married a wealthy heiress, Catarina Suárez de Figueroa. With this union, he acquired great fortune and became one of the most powerful nobles of his time. His sixth son from the marriage would one day become Cardenal Mendoza.

As a politician, Don Íñigo remained loyal to Juan II throughout his life, for which he was richly rewarded with land and the title of Marquis of Santillana in 1445, after the First Battle of Olmedo. When his wife Doña Catarina de Figueroa died, the Marquis retired to his palace of Guadalajara to spend the rest of his life in peaceful study and contemplation.

Lopez de Mendoza was a great admirer of Dante Alighieri and his work is categorized within the allegorical Dantesque School. He also assimilated Petrarch and Giovanni Boccaccio's Humanism.

He is especially remembered for his "serranillas", which are small poems that focus on commonplace subjects. He also wrote pastoral novels inspired by French tradition, and was originator of the Castilian Sonnet.