[1] He was the son of Lord Simon IV of Lippe and his wife, Margaret of Brunswick-Grubenhagen.

After Otto died in 1446, his great-uncle Archbishop Dietrich II of Cologne was appointed regent.

At the same time, he joined an alliance, which made him a party in the so-called Feud of Soest against Archbishop Dietrich II of Cologne.

In 1447, Dietrich called in a Bohemian army, which devastated the countryside in Lippe and levelled the town of Blomberg to the ground.

On the other hand, in 1464, he supported his own brother, Prince-Bishop Simon III of Paderborn against Louis II of Lower Hesse when they fought the Hesse-Paderborn Feud about Calenberg Castle.