Otto III was the son of Count Louis of Ravensberg and his wife Adelheid of Dassel.

Their mother, Adelaide, fled with her children to her relatives in Ratzeburg, whereupon Bernard forcibly occupied Ravensberg Castle.

In 1267, he fought on the side of Archbishop Engelbert II of Cologne in the Battle of Zülpich.

In 1290, Henry's successor Gerhard sold his share to Archbishop Siegfried II of Cologne.

On 12 July 1293, Otto III and his wife Hedwig found an abbey at Bielefeld.