He was the eldest son of Nicholas the Small, Duke of Münsterberg, by his wife Agnes, daughter of Herman Krušina of Lichtenberg.

A minor at the time of his father's early death in 1358, Bolko III and his younger brother Henry I were placed under the regency of their mother, the Dowager Duchess Agnes.

In order to secure his marriage with the daughter of Duke Bolesław of Bytom, Euphemia, Bolko III was forced to pledge his main city of Münsterberg.

However, thanks to this union, Bolko III could take possession over Gleiwitz in 1369; but four years later, in 1373, he sold the district to Konrad II the Gray, Duke of Oels (Oleśnica).

In 1379 Bolko III also sold the town of Kanth (Kąty Wrocławskie) to Konrad II the Gray, by the amount of 4,000 fines.