Caroline's third and present husband is Prince Ernst August of Hanover, Duke of Brunswick, head of the House of Hanover which lost its throne in 1866. From 1913 to 1918, his family ruled the sovereign Duchy of Brunswick.

Likewise, the Monégasque court officially notified France of Caroline's contemplated marriage to Prince Ernst August and received assurance that there was no objection, in compliance with Article 2 of the 1918 Franco-Monégasque Treaty. Despite obtaining the official approval of the governments of France, Monaco and the United Kingdom, upon Caroline's marriage to Ernst August he forfeited his own place in Britain's order of succession. He is also subject to the Act of Settlement 1701, which imposes that consequence upon British dynasts who marry Roman Catholics.

Princess Caroline's first husband was Philippe Junot (born 19 April 1940), a Parisian banker. They were married civilly in Monaco on 28 June 1978, and religiously on 29 June 1978. Their lavish wedding ceremony was attended by some 65 guests, including Hollywood stars Ava Gardner, Cary Grant and Frank Sinatra.

Caroline is married to Ernst August, Prince of Hanover (born 1954), the pretender to the former throne of the Kingdom of Hanover, as well as the heir male of George III of the United Kingdom.

Caroline was born on 23 January 1957 in the Prince's Palace, Monaco. She is the eldest child of Rainier III, Prince of Monaco, and his wife, former American Actress Grace Kelly. Christened Caroline Louise Marguerite, she belongs to the House of Grimaldi. She was the heir presumptive from her birth to 14 March 1958, when her brother Prince Albert was born. On 1 February 1965, her younger sister Princess Stéphanie was born. Caroline is a legitimate patrilineal descendant of the Dukes of Polignac, and as such belongs to the historical French nobility. Through her mother, she is of Irish and German descent.

Her second husband was Stefano Casiraghi (8 September 1960 – 3 October 1990), the sportsman heir to an Italian industrial fortune. They were married civilly in Monaco on 29 December 1983, and had three children:

The Princess received her French baccalauréat in 1974 with honors. She was also educated at St Mary's School Ascot. Caroline continued her studies at the Sorbonne University, where she received a diploma in philosophy and minors in psychology and biology. She is fluent in French, English, Spanish, German and Italian.

In 1979, Princess Caroline was appointed by her father as the President of the Monegasque Committee for the International Year of the Child. Two years later, in 1981, she founded her own foundation Jeune J'écoute. Other philanthropic organizations Caroline has been involved with include the World Association of Children's Friends (AMADE), the Princess Grace Foundation, the Prince Pierre Foundation, the Peter Le Marchant Trust and UNICEF. Her other patronages include the International School of Paris, Les Ballets de Monte Carlo, which she also founded, the Monte-Carlo Philharmonic Orchestra, the Association des Guides et Scouts de Monaco, the Monte Carlo Garden Club and The Spring Arts Festival.

The couple divorced, childless, on 9 October 1980. In 1992, the Roman Catholic Church granted the Princess a canonical declaration of nullity.

Following her mother's death in 1982, Caroline served as de facto first lady of Monaco until her brother married Charlene Wittstock in 2011. She regularly attends important social events in Monaco related to the Monegasque Princely Family, such as the National Day celebrations, the annual Rose Ball, the Red Cross Ball and the Formula One competition Monaco Grand Prix.

The two younger children are named for their maternal great-grandparents, Princess Charlotte and Prince Pierre, whilst Andrea was named for a childhood friend of his father's. Stefano Casiraghi was killed in a speed-boating accident in 1990, aged 30 years.

Despite their parents' not having married in the Church as required for legitimacy under church law, they were legitimised by Pope John Paul II in February 1993, eight months after their mother's marriage to Junot was annulled in June 1992.

Her husband's title as Duke of Brunswick is honorific since the ruling family of that state was removed by the Weimar Republic in 1918, along with all royal and noble German ruling families, which were still allowed to retain their titles. Neither she nor her husband has royal rank in Germany, but Monaco recognizes the Hanoverians' former German royal titles, attributing to the couple the style of Royal Highness. On 11 January 1999, shortly before Caroline and Ernst's wedding, his fourth cousin once removed (George III was their Common ancestor), Queen Elizabeth II of the United Kingdom, issued this Order in Council, "My Lords, I do hereby declare My Consent to a Contract of Matrimony between His Royal Highness Prince Ernst August Albert of Hanover, Duke of Brunswick-Luneburg and Her Serene Highness Princess Caroline Louise Marguerite of Monaco...". As a legitimate male-line descendant of George III, Ernst August was subject to the Royal Marriages Act 1772 (repealed in 2015). Prior to the repeal of the Act, the revised form of which limits those who must gain permission to the first six people in the line of British succession, marrying without the Queen's Royal Assent would have meant their marriage would be void in Britain, where Ernst August's family owned substantial property and he holds (dual) citizenship.

Albert's lack of legitimate children until the 2010s prompted Prince Rainier III to change the constitution so as to ensure there would be a successor to the throne, which strengthened the places of Caroline and her descendants in the line of succession. On 2 April 2002, Monaco passed Princely Law 1.249, which provides that if the Sovereign Prince assumes the throne and then dies without a legitimate direct heir, the throne will pass to his dynastic siblings and their descendants according to the rule of male-preference cognatic primogeniture. The law was then ratified by France, as required by a 1918 Franco-Monégasque Treaty, on 4 October 2005. Before this change, the crown of Monaco could pass only to a descendant of the last reigning Prince, excluding such collateral relations as siblings, nephews, and nieces.

Due to her commitment to philanthropy and arts, Caroline was named a UNESCO Goodwill Ambassador on 2 December 2003. The UNICEF honoured her with Children's Champion Award on 20 May 2006. The next year, she travelled to the Republic of South Africa to meet its former President Nelson Mandela. In December 2011, the World Association of Children's Friends honoured her for "tireless endeavours in continuing the organisation's legacy". Her personal friend and the Chanel head designer Karl Lagerfeld presented her the award. Caroline had also previously been given the Grand Cross of the Order of St. Charles, and had been appointed as the Commander of the Order of Cultural Merit.

Caroline has had a bad relationship with media and paparazzi since her youth, when she complained she "could not live the life of a normal student". On 24 June 2004, the Princess obtained a judgement from the European Court of Human Rights condemning Germany for non-respect of her right to private life under Article 8 of the European Convention on Human Rights. The case concerned, for instance, the publication of pictures of her taken secretly at the Beach Club in Monte Carlo, but the lack of implementation of the European Court of Human Rights judgement in Germany led to a second round of proceedings before the Strasbourg Court. This time five NGOs filed their observations in support of paparazzi, and the Princess lost her case.

In 2009, it was reported that Caroline had separated from Ernst August and returned to live in Monaco.

In January 2010, photos emerged of Ernst August kissing a woman who was not identified as Caroline, leading press to speculate that the couple are divorcing.

Caroline's personal interests include horseback riding, swimming and skiing. Since her youth, she has been considered an international fashion icon and as one of the best dressed women in the world. In November 2011, an exhibition honouring Princess Caroline was opened at the National Museum of Monaco.

Caroline is usually referred to and addressed by the female form of the higher style attributed (by tradition) to her husband, i.e. Her Royal Highness The Princess of Hanover, rather than by her own legal but lower title that, until 10 December 2014, was Her Serene Highness The Hereditary Princess of Monaco" or Her Serene Highness Princess Caroline of Monaco. Historically, styles associated with kingdoms, such as Ernst August's, have been deemed of higher rank and status than those associated with principalities.