As duke, Burgundy was invaded by King Philip II and Hugh was forced to sue for peace.

When Philip Augustus succeeded Louis in 1180, Hugh seized the opportunity and forced several men to change their allegiance to Burgundy.

[4] A peace was negotiated and Hugh had to pay a high ransom for his son and give up ambitions over French territory.

In 1187, Hugh transferred the capital of Burgundy to Dijon, and endeavoured to turn the city into a major commercial centre.

[5] Hugh played a major role in the victory of the Battle of Arsuf (7 September 1191) and at the Siege of Acre.