In the year 2072, at the time of the events depicted in System Shock, Edward Diego was the Vice President of Marketing for TriOptimum Corporation. Though the details of his activities before this time are scarce, it is revealed through the game's manual and various in-game audio logs that Diego was involved in illicit activities aboard Citadel Station, a TriOptimum mining station orbiting Saturn, including unauthorized experimentation. In fact, Diego's reputation within the company was less-than-sterling, and an undercover investigation of his actions had begun even before the incident depicted in the game. Diego himself was in the process of covering up all records of his impropriety, as TriOp had yet to obtain actual hard evidence of his crimes. However, some of the data which would implicate him was protected by SHODAN, the station's resident artificial intelligence. In an effort to completely whitewash any incriminating data, Diego blackmails a hacker who had recently been caught accessing TriOptimum's network, forcing him to remove SHODAN's security restrains so that he would have direct control of the station.
For a time, Diego is filled with a sense of smug self-security, believing that with SHODAN uninhibited, he is in complete control of Citadel Station, and thus immune to any punitive action TriOptimum might try to enforce. Before long, however, it becomes clear that the changes made to SHODAN have had a detrimental effect, and that she now sees the inhabitants of the station as inferior beings. Once Diego realizes that SHODAN has begun to systematically exterminate the station's denizens, he offers to cooperate with her in an attempt to save himself, even going as far as to sell out many of his fellow crewmen. Perhaps due to this assistance, or possibly in deference to his role in her creation, SHODAN transforms Diego into one of her most powerful and loyal cyborg creations. From then on, he acts as one of SHODAN's main executors, until he is killed, ironically at the hands of the very hacker he had convinced to unleash his master.
Over the course of the game, the nameless hacker encounters the cybernetic Edward Diego on three separate occasions. He first attacks the player on the executive level of the station near his personal quarters, where audio logs detailing his duplicity and self-serving behavior can be found. Diego is defeated by the hacker but not destroyed, later resurfacing when the player initiates the station's self-destruct protocol. Diego attempts to prevent the player from boarding an escape pod off the station, but is once again forced to withdraw in defeat, necessitating the direct intervention of SHODAN, who disables the pods herself. With no other means to escape the station's destruction, the hacker makes his way to the station's bridge, which SHODAN plans to disconnect from the station shortly before it explodes. Diego is last encountered lying in wait for the player at the only elevator to the bridge level. He attempts to bar passage, but is slain in the process, while the hacker continues on to challenge and overcome SHODAN in cyberspace.