Born in Madrid, Spain, in 1950, his childhood was marked by the republicanism of his family opposed to dictator Francisco Franco, winner of the Spanish civil war. He spent his childhood in schools run by republican teachers where he received a liberal education. In the seventies he got a degree in history and worked for years as a literary critic. Interested by cinema he wrote some screenplays. Some of then were adapted in the mid-eighties. Those films were thrillers involving strong female characters. For "Baton Rouge" and "A solas contigo" both starred by spanish actress Victoria Abril he was nominated for best original screenplay by the Spanish Academy.

In 1990 he was assistant to director Pedro Almodovar in the shooting of "Atame" played by Spanish stars Antonio Banderas and Victoria Abril.

Thanks to his reputation as screenwriter and the support of Victoria Abril he was able to set up his first film as director: "Nadie hablara de nosotras cuando hayamos muerto". It became the greatest hit of spanish cinema at its release in 1995. In the Festival de San Sebastian that movie won several awards (including best actress). "Nadie hablara de nosotras cuando hayamos muerto" also won 8 awards from the Spanish academy (including best film, best new director, and best actress). Inspired by filmmakers like Martin Scorsese or Paul Schrader, "Nadie hablará de nosotras ..." stunned audiences and critics by its violence and by the dark story of redemption of Gloria Duque, the main character of the movie.

In spite of the success of his first movie, Diaz Yanes spent a few years trying to make a new picture, titled "Madrid Sur", a science-fiction movie set up in the capital of Spain, but was unable to make it due to financial problems.

In 2001, he was able to feature together the two most international spanish actresses in his second movie "Sin noticias de Dios" a fantastic comedy that received 11 nominations for the Spanish Academy awards (including best picture and director) but disappointed many of the fans of his first movie.

In March 2006, he will started the shooting of his third movie "Capitán Alatriste", an adaptation of Arturo Perez Reverte's best-seller. Starred by LOTR's star Viggo Mortensen it tells the story of Alatriste a pessimistic Spanish soldier that will have to survive in the dangerous and decadent Spain of the XVIIth century.