In The Princess Bride, Inigo Montoya is portrayed as a Basque fencer and henchman to the Sicilian criminal Vizzini. Inigo's father Domingo was a great swordsmith, but he remained obscure because he disliked dealing with the rich and privileged. When Count Rugen, a nobleman with a six-fingered right hand, asked him to forge a sword to accommodate his unusual grip, Domingo labored over the sword for a year. When Rugen returned, he would not pay his promised price. Thus, Domingo refused to sell him the sword, not as a matter of money, but because Count Rugen could not appreciate the great work of the sword. He proclaimed that the sword would now belong to Inigo. Rugen then promptly killed Domingo. Eleven-year-old Inigo witnessed the crime and challenged Rugen to a fight, wherein Rugen disarmed Inigo in under a minute, but was genuinely disconcerted by the boy's skill at fencing; recognizing Inigo's talent, Rugen spared his life and allowed him to keep the sword, but gave him two scars, one on each cheek.

Inigo then went to live with his father's friend and fellow swordmaker Yeste for two years; devastated by the loss, he devoted himself to becoming a great swordsman to be able to avenge his father. His training included tutelage under the most skilled fencing masters of his time. In the 30th anniversary version of "The Princess Bride", it is revealed that, while training for his revenge against Count Rugen, Inigo falls in love with a servant girl, Giulietta. He woos her, and she reveals that she is a Countess and is in love with him as well. The two dance, and it is implied that Inigo leaves the next day. After ten years of training, Inigo becomes the greatest swordsman of his generation and the only living man to hold the rank of "wizard" (a fictional fencing rank above "master").

It seems likely that he was inspired by the real-world Ignatius of Loyola, whose birth name was Iñigo, due to a similarity in their name and the fact that both sought revenge at a point.^[2]

It's never mentioned if Domingo's wife was alive when he was killed.