He was the second son of Margrave Engelbert II and his first wife Uta of Passau. When his father succeeded his elder brother Henry as Duke of Carinthia, Engelbert III received the margravial title in Istria. However, he mainly ruled in the Sponheim estates around Kraiburg in Bavaria, bequested by his mother.
In 1135 Emperor Lothair III dispatched him to a synod at Pisa in Italy, in order to back Pope Innocent II against Antipope Anacletus II. In turn, Engelbert was vested with the Imperial March of Tuscany, but was succeeded by the Welf duke Henry X of Bavaria already in 1137. Engelbert attended the 1156 Imperial Diet in Regensburg, where he witnessed the granting of the Privilegium Minus by Emperor Frederick Barbarossa, elevating the March of Austria to a duchy.
In 1140 Engelbert had married Matilda, youngest daughter of the Bavarian count Berengar II of Sulzbach. He was thus a brother-in-law of Gertrude of Sulzbach, consort of King Conrad III of Germany, and Bertha of Sulzbach, as Irene wife of the Byzantine Emperor Manuel I Komnenos. Matilda died late in 1165, the marriage remained childless. The margravial title in Istria passed to the Bavarian Counts of Andechs.
- He is sometimes numbered Engelbert II of Istria, but in fact must be II of Carniola.
- In contemporary documents marchio Ystrie and marchio de Hystria
- Bannato, U. (11 February 2008). "I Patriarchi Ghibellini di Aquileia". Retrieved 2013-11-30.
| Margrave of Istria
| Margrave of Tuscany