Otto was born in Mosbach in 1390 as the youngest son of Rupert III of the Palatinate, King of Germany. In 1410 after the death of his father, the territories of the Palatinate were divided between his four sons; Otto received the territory around Mosbach and Eberbach. 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. He held the regency until 1442.