2013 South American Youth Championship
He made his debut with Uruguay in the 2013 South American Youth Championship in Argentina, on 10 January 2013 in the 3–3 draw against Peru. Two days later, he scored his first goal in the 6th minute in an eventual 3-2 win over Brazil. On 18 January, his team finished 2nd in Group B, behind Peru.
On 3 February, he completed all games played, and Uruguay qualified for the 2013 FIFA U-20 World Cup in Turkey and was included in the best XI of the event.
2013 FIFA U-20 World Cup
After contributing to qualification for the 2013 FIFA U–20 World Cup, he was included in the squad for the event. He made his debut on 2 June 2013, in the 1–0 defeat against Croatia, where he played the full 90 minutes. The first victory in the group stage came in the next game, as Uruguay beat New Zealand 2–0. Diego Laxalt was substituted in the 82nd minute for Gonzalo Bueno.
Uruguay also won the last game of the group stage against Uzbekistan, 4–0, the game that allowed Uruguay to qualify for the next round in 2nd place with 6 points, only behind Croatia. In the second round, Uruguay defeated Nigeria, with a 2-1 result, where he was substituted for Gonzalo Bueno in the 77th minute. On 6 July, at the quarter-final against Spain, the game went to extra time, which Uruguay won 1-0, Felipe Avenatti scoring the only goal of the game. Diego Laxalt played all 120 minutes. Uruguay drew Iraq for the semi-finals of the competition.
Diego Laxalt was called up to Uruguay’s Copa America Centenario squad to replace the injured Cristian Rodríguez. He made his full debut against Ireland on 4 June 2017. He was called up to the full Uruguay squad for the China Cup on March 2018.
On May 2018, he was named in Uruguay’s provisional 26-man squad for the 2018 World Cup in Russia.