In 976 he suppressed a rebellion that was led by his cousin Henry II, duke of Bavaria. Two years later, having been attacked by Lothair, king of France, Otto drove the French out of Lorraine but was unsuccessful in besieging Paris. Later Lothair renounced Lorraine, and peace was established. Otto next invaded southern Italy, gaining possession of Naples, Salerno, and Taranto, but he was overwhelmingly defeated by the Greeks and Saracens at Crotona in 982. He died in Rome while planning a second invasion.
His wife, Theophano, brought Byzantine refinement and culture to the German court.