Henry was the son of Gerhard VI of Holstein and Catherine Elisabeth of Brunswick-Lüneburg (d. 1417/1422) from the Holstein-Rendsburg line of the House of Schauenburg.
His father, Gerhard VI, fell in battle on 4 August 1404 during an attempt to conquer Dithmarschen.
Henry III claimed it as a hereditary fief; the Danish Margaret I and later Eric VII, wanted the duchy for themselves.
Henry IV, together with his younger brothers Adolf VIII and Gerhard VII, continued the war with Denmark.
Henry IV tried to gain support from the Hanseatic cities in Saxony, from the Frisians in Eiderstedt and even from the Victual Brothers.