As a scion of the Leopoldian line, he ruled over the Inner Austrian duchies of Styria, Carinthia and Carniola from 1424, from 1457 also over the Archduchy of Austria until his death, rivalling with his elder brother Emperor Frederick III.

Albert was born in Vienna, the son of the Inner Austrian duke Ernest the Iron from his second marriage with the Piast princess Cymburgis of Masovia.

[2] Still minors upon the death of their father in 1424, he and his brother remained under the tutelage of their uncle Duke Frederick IV of the Empty Pockets,[2] who ruled over Further Austria and the County of Tyrol.

Coming of age in 1436, Albert, though a junior heir of Inner Austria, received no full rulership anywhere for a long time, which caused friction in his relations with his elder brother Frederick V. When in 1439 both Duke Frederick IV of Further Austria and King Albert II of Germany, Duke of Austria died, Archduke Frederick assumed the guardianship over their minor sons Sigismund and Ladislaus the Posthumous.

The conflict between the brothers escalated when Duke Ladislaus Posthumous of Austria died childless in 1457 and Frederick, Holy Roman Emperor since 1452, came into his inheritance.