Francesco III was born in 1698, the son of Rinaldo, Duke of Modena and Reggio.
With alternating destinies he extricated himself from amidst the events which marked Northern Italy following the outbreak of the Polish War of Succession (1733). He also took part in the Austrian War of Succession (1742-1748), siding with Spain.
His possession of the Duchy was confirmed by the Peace of Aquisgrana which acknowledged Maria Theresa of Habsburg (1717-1780) as Empress. From then on he remained faithful to the Austrian Empress, to the point of lending her 100.000 gold ducats during the Seven Years' War. A hedonist and libertine, although also one who loved the company of men of letters and poets, Francesco III was abandoned by his first wife, Carlotta Aglae of Bourbon, who died in Paris in 1761 to where she had moved. His second marriage was to Teresa Castelberco. Following her death in 1765 he then married Renata Teresa d'Harrach - widow of Melzi - who survived him.
Due to the strategic position of the Duchy of Modena, 'hinging' the Po Valley, Liguria and Tuscany, Francesco III was at the centre of attention on the part of the Austrian Government in Italy.
The artificer of this policy was Beltrame Cristiani, plenipotentiary of Maria Theresa in Lombardy. Thanks to a shrewd matrimonial agreement with which the neice of the Duke was conceded to the third son of the Empress, Cristiani bound the Este family to the Habsburgs. The matrimonial contract stipulated in 1753 established that in exchange Francesco III - who was more inclined towards mundane activities than he was in facing political intrigues - should obtain the honorary appointment of Administrator of the Duchy of Milan (which allowed him to take part in the pleasures offered by the city).
In 1764, perhaps satisfied with the distractions his social condition had allowed him to enjoy up until this point, he asked Maria Theresa for the concession of a fife where he could adequately find settlement , placing his residence there. Francesco III had his eyes on Varese where in 1755 he had sojourned as a guest of Marquis Paolo Antonio Menafoglio, enjoying the villa life which the Milanese aristocracy so much relished on the Colle di Biumo.
In 1766 the affirmative answer arrived from Vienna for this ducal request (although not before an accurate investigation regarding the value of the lands conceded had been carried out by the diligent Austrian functionaries). The territory of Varese therefore became the fife of Francesco III until his death, after which it would have returned to become an Austrian possession.
In this way the town lost its centuries-old independence, assiduously defended to the end by way of pleas and instances to the Austrian government - only to be sacrificed in the name of more lofty political reasons.
Only a few days before the signature on the diploma of enfeoffment Francesco III had purchased the housed owned by Tommaso Orrigoni, lying just outside Varese on the road for Casbeno. He transformed it into his residence with important enlargement works which lasted until 1773. A residence surrounded by a grandiose garden in the Italian style, although with references to that of Sh"nbrunn in Austria.
In 1771 Francesco III, Duca d'Este, established his home in Varese with the transfer of his court and the lifestyle to which he was so accustomed. It was due to his patronage, moreover, that also the Ducal Theatre was built.
Francesco III died in 1780.