He studied in 1663 at the military academy in Paris and raised a regiment in 1667 and 1672.
He fought in the Siege of Maastricht (1673), and one year later against the French in the Battle of Seneffe.
In 1682 he joined the Imperial Army and fought against the Turks in the Battle of Vienna and the Siege of Buda (1684).
In 1685, Emperor Leopold I named him Oberhofmeister and in 1692 he became Konferenzrat.
He gained great influence at the Austrian court and encouraged several reforms. When Joseph I became Emperor in 1705, Carl Theodor Otto remained Obersthofmeister and First Geheime Rat, which gave him powers equal to that of a Prime Minister. But he was more and more opposed by the successful and influential Field Marshal Prince Eugene of Savoy.
After Carl Theodor Otto caused a painful conflict with Pope Clement XI in 1709 over the city of Comacchio, he was encouraged to retire from service due to health problems.
He died one year later.