[2] He was born in Winchester, England during his father's exile;[3] he probably remained there when Henry returned to Saxony and was raised at his uncle King Richard I's court.

After his unsuccessful uprising, Henry had submitted to the Hohenstaufen emperor Frederick Barbarossa in 1181 and though he had to leave Germany, he could retain the Welf possessions around Lüneburg, Brunswick, and Haldensleben.

The Welf brothers entered into an agreement with Adolf of Altena, archbishop of Cologne, who in 1198 crowned Otto, King of the Romans during the throne quarrel with the Hohenstaufen heir Philip of Swabia.

William received the northern territories up to the Danish border around the town of Lüneburg, the territory of Lauenburg beyond the Elbe River, Hitzacker, Lüchow, and Dannenberg, as well as the lands around Haldensleben and in the eastern Harz mountain range including Blankenburg and Heimburg with Regenstein Castle.

William concentrated on consolidating his rule, strongly relying on the salt trade around Lüneburg, which became his permanent residence.