He was Prince-Bishop of Passau and of Strasbourg, until he resigned to get married, and Archduke of Further Austria including Tyrol.

Leopold was born in Graz, and was invested as bishop in 1598, as a child, even though he had not been ordained as a priest; he became Prince-Bishop of Strasbourg in 1607, a post which he held until 1626.

From 1609 onwards he fought with his mercenaries in the War of the Jülich succession (Archduke Leopold in the War of the Jülich Succession), and in the Brothers' Quarrel within the Austrian Habsburg dynasty against his first cousin Maximilian III, Archduke of Further Austria in Tyrol, and from 1611 for his first cousin Rudolf II in Bohemia.

In 1614, he financed the construction of the Church of the Jesuit College of Molsheim, within which his coat of arms is still prominently displayed.

With his wife Claudia de' Medici, he became the founder of a sideline of the Habsburg family, which persisted until 1665 - the most recent line of Archdukes of Further Austria.