Otto was born in Mosbach in 1390 as the youngest son of Rupert III of the Palatinate, King of Germany.

He made Mosbach his capital and began the construction of a new residence there.

Otto became the regent of the Electorate of the Palatinate and guardian of his nephew Louis IV after his brother Louis III returned from a pilgrimage to Jerusalem seriously ill and died soon after.

In 1448 he inherited half of the territory of the extinct Palatinate-Neumarkt line and purchased the other half from his brother Stephen, and he also established a residence in Neumarkt.

Otto married Joanna of Bavaria-Landshut (1413 – 20 July 1444), daughter of duke Henry XVI in January 1430 and had the following children: