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When his father died in 1675, Ernest and his six brothers jointly assumed the government of the duchy; five years later, in 1680, and under the treaty of division of the family lands, he received the towns of Hildburghausen, Eisfeld, Heldburg, Königsberg. Ernest became thereby founder and first duke of Saxe-Hildburghausen. After the death of his brothers Heinrich and Albrecht without male descendants, he took the towns of Sonnefeld and Behringen.
Ernest settled his official residence in Hildburghausen and began the building of his castle. In 1710 he approved the building in his lands of a new city of French Huguenot families, who were driven out after the Edict of Nantes from France.
In the building of his new residence, Ernest acquired a serious indebtedness of the principality to his brothers, which could not be reduced even by ever larger taxations.
