Conrad's sister Helen of Znojmo became a Polish duchess by her marriage to High Duke Casimir II the Just.

At the same time, Frederick Barbarossa aimed at weakening his rule: he summoned the adversaries to the Imperial Diet at Regensburg, where he appointed Conrad ruler of the united principalities of Znojmo, Brno and Olomouc, elevated to the Margraviate of Moravia.

The conflict between the Bohemian and the Moravian branches culminated in a bloody battle at Loděnice on 10 December 1185, after which both sides chose to enter into peace negotiations.

Conrad assumed an active role in Imperial politics, arbitrating in the conflict around the disputed succession of Margrave Otto II of Meissen.

He was forced to concede them a set of privileges by the iura Conradi (Czech: Statuta Konrádova), the first Bohemian codex issued at Sadská in 1189.