When his father retired to a monastery in 1238, he ruled the Holstein jointly with his elder brother John I, initially under the guardianship of their brother-in-law the Duke Abel of Schleswig.

Gerhard took Holstein-Itzehoe, consisting of the districts of Stormarn, Plön and Schaumburg, with his residence in Itzehoe.

John later won Rendsburg back from Denmark and traded it with Gerhard for Segeberg.

Gerhard founded several villages, in order to develop Holstein and control the area.

He fought ward with the Archdiocese of Bremen, the City of Lübeck and the landed gentry in his county.