During his reign, the part of Armenia that Arshak III governed was under Roman rule from the Peace of Acilisene.
His known grandparents, both from his paternal side, were the previous ruling Arsacid monarch Arshak II and his wife Parandzem.
Following the assassination of his father in 374, as Arshak III and his brother were too young to rule, the Roman emperor Valens sent their paternal first cousin Varazdat to occupy the Armenian throne.
Manuel then raised Arshak III and Vologases to the throne as co-kings of Armenia, under the nominal regency of their mother Zarmandukht.
As Manuel Mamikonian died at the same time as Vagharshak did, the authority of Arshak III became lessened by the Sassanid invasions from Persia of Armenia.