Herman II was born in Lippe (now called Lippstadt), the eldest son of Lord Bernhard II and his wife, Heilwig, a daughter of Count Otto I Heilwig of Are-Hostaden.
He was less belligerent than his father and brother, and often tried to act as intermediary when his neighbours had a dispute.
He promoted the cities and gained the post of Vogt of the Monasteries Clarholz and Herzebrock.
His main opponent during this period was Engelbert II of Berg, who was Archbishop of Cologne.
He supported his brother, Archbishop Gerhard II of Bremen against the farmers in Stedingen and fell in battle against them.