He was the son of Count Herman II and his wife, Beatrix of Andechs-Merania. In 1248, Otto III and his elder brother Herman III inherited the Franconian possessions of their maternal uncle Otto II. They divided their possessions, with Otto receiving Weimar, Rudolstadt and Plassenburg and Herman receiving Orlamünde.
On 29 December 1279, Otto III founded Himmelskron Abbey. He died in June 1285, and was buried in the collegiate church of the abbey.
Otto III was married to Agnes of Truhendingen (d. 13 May 1285). Together, they had the following children:
Sculpture on his grave
His coat of arms