Unlike his ancestors, Nikolaus did not spend his youth in the Schloss Esterháza in Hungary, but in England, where his father, Paul III Anton, Prince Esterházy, was Ambassador for the Austrian Emperor.

Lady Jersey was a close friend of his mother Princess Maria Theresia of Thurn and Taxis, who served with her for many years as a patroness of Almack's, the centre of London's social scene.

They had three sons, Paul IV, Prince Esterházy (born 1843), Aloys (1844), and Anton (1851).

After his return from England, Nikolaus entered into the service of the new Emperor Franz Joseph I of Austria, and accompanied him on his travels through Hungary and Transylvania.

In 1865 the Esterházy estates had been placed in the hands of curators until 1898, because of the enormous debts caused by his father's and grandfather's extravagance.