Her mother was the youngest surviving daughter of King Maximilian I Joseph of Bavaria by his second wife Margravine Karoline of Baden.

Her godmother and namesake was her mother's niece Grand Duchess Mathilde of Hesse and by Rhine.

On 5 June 1861, Mathilde married Prince Lodovico of Bourbon Two-Siclies, Count of Trani.

They had one child, a daughter: Allegedly, during the early years of her marriage, Mathilde had an affair with the Spanish diplomat Salvador Bermúdez de Castro y Díez [es], 1st Duke of Ripalda and Santa Lucía, with whom she had a daughter at the Villa Farnesina in Rome:[1] However, the Two Sicilies were conquered by the Expedition of the Thousand under Giuseppe Garibaldi in 1861.

Francis was eventually succeeded by their younger brother Prince Alfonso, Count of Caserta.