Frederick was the youngest son of Duke Leopold III (1351–1386) and his wife Viridis (d. 1414), a daughter of Bernabò Visconti, Lord of Milan. According to the 1379 Treaty of Neuberg, his father ruled over the Habsburg Inner Austrian territories of Styria, Carinthia, Carniola, as well as over Tyrol and the dynasty's original Further Austrian possessions in Swabia. After the early death of Duke Leopold in the 1386 Battle of Sempach, Frederick and his elder brothers William, Leopold IV and Ernest initially remained under the tutelage of their uncle Duke Albert III of Austria.