Nuño de Guzmán has by 1536 completed the bloody six-year conquest of the region of modern-day Jalisco and other Pacific coastal regions, but has found little silver and no trace of the fabled “Seven Cities.” Reports of Guzmán's treatment of indigenous peoples had reached Mexico City and Spain, and, at Bishop Zumárraga's request, the Crown had sent Diego Pérez de la Torre to investigate.

Guzmán was arrested in 1536, held prisoner for more than a year, then sent to Spain in fetters.

He will be released from the Castle of Torrejón prison in 1538, and in 1539 will return to his position as royal contino bodyguard—court records show him on the payroll every year from 1539 to 1561 (in 1561 as "deceased").

In 1552 he will write up a memorial containing his own version of the events leading to his fall, justifying his execution of the Purépecha Cazonci as being necessary in order to bring a Christian rule of law to the area, and assuring that: "in truth no execution more just has been carried out in all of New Spain, and if I were deserving of any punishment it would be for having doubted some days about whether to carry it out."

In 1558 he will write his last will.

Uncovered in 1973, it shows him as a poverty stricken noble struggling to save his heirs from his debts, having had even to pawn his heirlooms to pay for medicine.

In it, he requests some of the property that was confiscated from him to be returned to his heirs, and wages still due to him for his years as Governor and President be paid and turned over to his heirs.

With affection he bequeaths most of his belongings to a woman Sabina de Guzmán, who had taken care of him in his illness.

He also bequeaths belongings to the Franciscan Order, in spite of the conflicts he had had with its members in New Spain.

He probably died in Valladolid in 1558 on October 16 or shortly thereafter.