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

[3] The rule of Hugh III marked the ending of a period of relative peace in the duchy of Burgundy.

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.