Historians have disagreed on how to characterize the political philosophies of Franz Ferdinand, some attributing generally liberal views on the empire's nationalities while others have emphasized his dynastic centralism, Catholic conservatism, and tendency to clash with other Leaders. He advocated granting greater autonomy to ethnic groups within the Empire and addressing their grievances, especially the Czechs in Bohemia and the south Slavic peoples in Croatia and Bosnia, who had been left out of the Austro-Hungarian Compromise of 1867. Yet his feelings towards the Hungarians were less generous, often described as antipathy. For Example, in 1904 he wrote that "The Hungarians are all rabble, regardless of whether they are minister or duke, cardinal or burgher, peasant, hussar, domestic servant, or revolutionary" and he regarded even István Tisza as a revolutionary and "patented traitor". He regarded Hungarian nationalism as a revolutionary threat to the Habsburg dynasty and reportedly became angry when officers of the 9th Hussars Regiment (which he commanded) spoke Hungarian in his presence — despite the fact that it was the official regimental language. He further regarded the Hungarian branch of the Dual Monarchy's army, the Honvédség, as an unreliable and potentially threatening force within the empire, complaining at the Hungarians' failure to provide funds for the joint army and opposing the formation of artillery units within the Hungarian forces.

Franz Ferdinand was born in Graz, Austria, the eldest son of Archduke Karl Ludwig of Austria (younger brother of Franz Joseph and Maximilian) and of his second wife, Princess Maria Annunciata of Bourbon-Two Sicilies. In 1875, when he was only eleven years old, his cousin Duke Francis V of Modena died, naming Franz Ferdinand his heir on condition that he add the name Este to his own. Franz Ferdinand thus became one of the wealthiest men in Austria.

In 1889, Franz Ferdinand's life changed dramatically. His cousin Crown Prince Rudolf committed suicide at his hunting lodge in Mayerling. This left Franz Ferdinand's father, Karl Ludwig, as first in line to the throne. Karl Ludwig died of typhoid fever in 1896. Henceforth, Franz Ferdinand was groomed to succeed to the throne.

Despite this burden, he did manage to find time for travel and personal pursuits, such as the trip round the world he embarked on in 1892. After visiting India he spent time hunting kangaroos and emus in Australia in 1893, then travelled on to Nouméa, New Hebrides, Solomon Islands, New Guinea, Sarawak, Hong Kong and Japan. After sailing across the Pacific on the RMS Empress of China from Yokohama to Vancouver he crossed the United States and returned to Europe.

In 1894 Franz Ferdinand met Countess Sophie Chotek at a ball in Prague. To be eligible to marry a member of the Imperial House of Habsburg, one had to be a member of one of the reigning or formerly reigning dynasties of Europe. The Choteks were not one of these families, although they did include among their ancestors, in the female line, princes of Baden, Hohenzollern-Hechingen, and Liechtenstein. One of Sophie's direct ancestors was Albert IV, Count of Habsburg; she was descended from Elisabeth of Habsburg, a sister of King Rudolf I of Germany. Franz Ferdinand was a descendant of King Rudolf I. Sophie was a lady-in-waiting to Archduchess Isabella, wife of Archduke Friedrich, Duke of Teschen. Franz Ferdinand began to visit Archduke Friedrich's villa in Pressburg (now Bratislava). Sophie wrote to Franz Ferdinand during his convalescence from tuberculosis on the island of Lošinj in the Adriatic. They kept their relationship a secret.

Franz Ferdinand, like most males in the ruling Habsburg line, entered the Austro-Hungarian Army at a young age. He was frequently and rapidly promoted, given the rank of lieutenant at age fourteen, captain at twenty-two, colonel at twenty-seven, and major general at thirty-one. While never receiving formal staff training, he was considered eligible for command and at one point briefly led the primarily Hungarian 9th Hussar Regiment. In 1898 he was given a commission "at the special disposition of His Majesty" to make inquiries into all aspects of the military services and military agencies were commanded to share their papers with him.

Deeply in love, Franz Ferdinand refused to consider marrying anyone else. Finally, in 1899, Emperor Franz Joseph agreed to permit Franz Ferdinand to marry Sophie, on condition that the marriage would be morganatic and that their descendants would not have succession rights to the throne. Sophie would not share her husband's rank, title, precedence, or privileges; as such, she would not normally appear in public beside him. She would not be allowed to ride in the royal carriage or sit in the royal box in theaters.

He was disappointed when Austria-Hungary failed to act as a Great Power, such as during the Boxer Rebellion, in 1900. Other nations, including, in his description, "dwarf states like Belgium and Portugal", had Soldiers stationed in China, but Austria-Hungary did not. However, Austria-Hungary did participate in the Eight-Nation Alliance to suppress the Boxers, and sent Soldiers as part of the "international relief force".

He also held honorary ranks in the Austro-Hungarian Navy, and received the rank of Admiral at the close of the Austro-Hungarian naval maneuvers in September 1902.

Franz Ferdinand exerted influence on the armed forces even when he did not hold a specific command through a military chancery that produced and received documents and papers on military affairs. This was headed by Alexander Brosch von Aarenau and eventually employed a staff of sixteen. His authority was reinforced in 1907 when he secured the retirement of the Emperor's confidant Friedrich von Beck-Rzikowsky as Chief of the General Staff. Beck's successor, Franz Conrad von Hötzendorf, was personally selected by Franz Ferdinard.

After a short rest at the Governor's residence, the royal couple insisted on seeing all those who had been injured by the bomb at the local hospital. However, no one told the drivers that the itinerary had been changed. When the error was discovered, the drivers had to turn around. As the cars backed down the street and onto a side street, the line of cars stalled. At this same time, Princip was sitting at a cafe across the street. He instantly seized his opportunity and walked across the street and shot the royal couple. He first shot Sophie in the abdomen and then shot Franz Ferdinand in the neck. Franz leaned over his crying wife. He was still alive when witnesses arrived to render aid. His dying words to Sophie were, 'Don't die darling, live for our children.' Princip's weapon was the pocket-sized FN Model 1910 pistol chambered for the .380 ACP cartridge provided him by Serbian Army Colonel and Black Hand member Dragutin Dimitrijević. The archduke's aides attempted to undo his coat but realized they needed scissors to cut it open: the outer lapel had been sewn to the inner front of the jacket for a smoother fit to improve the Archduke's appearance to the public. Whether or not as a result of this obstacle, the Archduke's wound could not be attended to in time to save him, and he died within minutes. Sophie also died en route to the hospital.

Franz in 1913, as heir-presumptive to the elderly Emperor, had been appointed inspector general of all the armed forces of Austria-Hungary (Generalinspektor der gesamten bewaffneten Macht), a position superior to that previously held by Archduke Albrecht and including presumed command in wartime.

On Sunday, 28 June 1914, at about 10:45 am, Franz Ferdinand and his wife were killed in Sarajevo, the capital of the Austro-Hungarian province of Bosnia and Herzegovina, by Gavrilo Princip, 19 at the time, a member of Young Bosnia and one of a group of assassins organized and armed by the Black Hand. The event led to a chain of events that eventually triggered World War I.

Archduke Franz Ferdinand and his Castle of Artstetten were selected as a main motif for the Austrian 10 euro The Castle of Artstetten commemorative coin, minted on 13 October 2004. The reverse shows the entrance to the crypt of the Hohenberg family. There are two portraits below, showing Archduke Franz Ferdinand and his wife Sophie, Duchess of Hohenberg.

He also advocated a careful approach towards Serbia – repeatedly locking horns with Franz Conrad von Hötzendorf, Vienna's hard-line Chief of the General Staff, warning that harsh treatment of Serbia would bring Austria-Hungary into open conflict with Russia, to the ruin of both Empires.

Earlier in the day, the couple had been attacked by Nedeljko Čabrinović, who had thrown a grenade at their car. However, the bomb detonated behind them, hurting the occupants in the following car. On arriving at the Governor's residence, Franz angrily shouted, "So this is how you welcome your guests — with bombs!"