Prior to her first marriage, she was the mistress of her cousin, the Serbian ruler, Prince Mihailo Obrenović III, who was considering a divorce from his childless wife Princess Julia to make Katarina his consort.

On 10 June 1868, while she, Prince Mihailo and Princess Anka were strolling through Kosutnjak park near the royal country residence, assassins shot and killed her lover and mother, and left her wounded.

Mihailo wished to divorce his wife and marry Katarina,[2] especially as Julia had her own lover, Duke Karl von Arenberg (1831-1896), cousin of Empress Sissi.

[3] While the Serbs made no secret of their mistrust of Julia due to her Catholic religion and Hungarian background, when the news spread of Mihailo's desire to seek a divorce in order to replace her with his second cousin, Katarina, the ordinary people as well as politicians and the clergy were all equally outraged at the prospect.

They left Serbia and commenced a vagabond existence, living in various places throughout the Austro-Hungarian empire; however, they later returned to Belgrade, where he served as mayor from 4 April 1886 to 4 February 1887.

She subsequently left her husband for her young lover, and she received financial support from her son as well as her wealthy half-sister, Simeona Lahovary (1858-1915), who was married to an important Romanian politician, Alexander Lakhovari (1841–1897) and served as a court lady to Queen Elizabeth of Romania.