Otto was the son of Frederick II of Brunswick-Lüneburg and Magdalena of Brandenburg. After his brother died without issue, Otto took over the Principality of Lüneburg in 1464. Otto's reign was marked by the monastic reform movements of his time which he tried to implement in the Lüneburg monasteries. He entered Wienhausen Abbey, removed a number of art treasures which, in Otto's opinion were contrary to the ideal of monastic simplicity, and sent the abbess to be "re-educated in a monastery that was already reformed." According to a legend, Otto was killed at a tournament on the Celle jousting field. Today, a horseshoe in plaster marks the spot where Duke Otto the Magnanimous is supposed to have had the accident in 1471.