Isabella Clara was born in Innsbruck on 12 August 1629[1] as the third child and second (but eldest surviving) daughter of Leopold V, Archduke of Further Austria and Count of Tyrol and his wife Claudia de' Medici.

[1] Thanks to this alliance with the House of Habsburg, Charles II was able to remove the French from Casale and then agreed with King Louis XIV of France that Spain should not control the Duchy of Montferrat; rather, it would remain with the Gonzaga family.

In March 1651, together with her husband and mother-in-law, Isabella Clara accompanied her sister-in-law, Eleonora Gonzaga, for her wedding with Ferdinand III, Holy Roman Emperor in Wiener Neustadt.

[6] In Revere on 31 August 1652, Isabella Clara gave birth to her only child, Ferdinand Charles, the future and last Duke of Mantua and Montferrat of the House of Gonzaga; however, this didn't help the couple overcome their differences.

Isabella Clara, with the help of Pope Alexander VII, expelled her husband's mistress to Rome;[9] but this didn't stop the hypersexuality of Charles II, who continued taking lovers, both male and female.

When she became a Regent on behalf of her minor son, she appointed Count Bulgarini as her First Minister and took a neutral position between the Spanish and French kingdoms and also kept a cautious policy to ensure that Mantua and Montferrat would become independent from the Holy Roman Empire.

In addition, Count Bulgarini used his position to improve the economic situation of the state with several tax, judicial and law enforcement systems [6] and the quality of life of the local population.

Additionally, the Dowager Duchess obtained the approval of the Emperor that, after the death of Ferrante III (who had no surviving male heirs), the Duchy of Guastalla would be passed to her son, as his wife's inheritance, successfully.

[6][13] After the official wedding ceremony of her son with the Guastalla heiress in July 1671, Isabella Clara retired from court and moved to Goito Castle, where she lived with Count Bulgarini, whom she married secretly shortly thereafter.