After the murder of King Albert I in 1308, the Habsburgs lost out in the struggle around the German throne, when Frederick the Fair was defeated by his Wittelsbach rival Louis in the 1322 Battle of Mühldorf. In the course of a rapprochement of both dynasties, married Elizabeth of Wittelsbach, a daughter of Duke Stephen I of Bavaria. From 1329 onwards, administrated the original Habsburg possessions in Swabia (Further Austria).
Louis IV, Holy Roman Emperor since 1328, also vested with the title of an Imperial vicar.
Two months later, "s maternal uncle, the Meinhardiner duke Henry of Carinthia died without male heirs, whereupon Emperor Louis IV on May 2, 1335 ceded the Duchy of Carinthia, the adjacent March of Carniola and the southern part of the Tyrol to and Albrecht as Imperial fiefs in Linz. was enthroned as duke in accordance with the archaic Carantanian rite on the Zollfeld plain, and, from that time onwards, took care of Carinthia rather than of the Austrian duchy. His nickname the Merry refers to the festive life at his court. died at Neuberg Abbey at the age of 37.