Focusing on the Franconian margraviates of Brandenburg around 1500, this study argues that the process of state formation engendered an elite of nobles who derived their power and status from the possession of high office. It shows, however, that as the state expanded, and the princely debt mounted, the relationship between ruler and noble elite was transformed: the leading nobles came to control more and more of the state in terms of offices and share of the public debt. To secure themselves in this elevated but unstable position they developed a dense network of marriage alliances among themselves. By the early sixteenth century this consortium of eminent nobles acquired a powerful hold on the princely state to the detriment of the princes and the exclusion of fellow nobles. The article suggests that it is against this background that the notorious deposition in 1515 of Margrave Friedrich by his sons should be seen: his overthrow was, among other things, an outcome of a change in the balance of power between prince and nobles that had been taking place since 1450. Finally, this change played a part in the creation of the Imperial Knighthood by which the nobles constitutionally placed themselves outside the princely states.