Domingo Martínez de Irala could be considered one of the greatest and most important men in the history of Paraguay. Even though he was not the man to found the capital of Paraguay, Asunción, he was the founder of the laws that governed the lives of the population, and was responsible for the blending of the blood of the native Guaraní people and the original Spanish colonists. The modern ramifications of his actions in encouraging the intermarriage of the two groups are that today, Paraguay has a large mestizo population and the second language of Paraguay is Guaraní. Irala strongly encouraged the criollo (Spanish born in the Americas) women from Spain to intermarry and the Spanish men to marry native women so as to stay in Paraguay and populate the new country. It was strongly advocated by Irala, to the point where he actually forbade any of the men from leaving the new colony and returning to Spain.

Irala was the firstborn son of Don Martín Pérez de Irala, royal scribe to the king of Spain, and Doña Marina de Toledo Albisúa. He was born in the town of Vergara de Guipuzcóa in 1510.

The conquistador Pedro de Mendoza had first arrived in La Plata in 1535 and was engaged in an expedition for Spain when Juan de Ayolas arrived, accompanied by Irala. Irala had been part of a party sent by the first Adelantado in search of the elusive idea of a mountain range in La Plata, and held command of one of the ships in the 3 ship fleet.

When they arrived at the port of Candelaria, Ayolas left Irala there in charge of the company of men while he continued in the expedition. Later, when Juan de Salazar arrived where Irala was, some leagues north from the port of Candelaria, they joined together to go in search of Ayolas. After an unsuccessful search, Irala returned to Candaleria while Salazar returned to the guaraní land where he founded a city called Asunción, later the capital of modern-day Paraguay.

Tensions arose between Irala and Ruiz Galan, the man in charge of Buenos Aires, over authority and hierarchy. The judge Alonso Cabrera arrived to solve the matter and Irala was given the fort of Asuncion by Salazar.