Caroline Matilda had two children, both of whom were officially fathered by Christian VII.
On 28 January 1768 Caroline Mathilde gave birth to the Crown Prince, later to become King Frederick VI of Denmark and Norway. In May of the same year Christian VII took his long tour of Europe, including stays in Altona, Paris and London. At the same time Caroline Mathilde spent the summer at Frederiksborg Castle with her new child before returning to Copenhagen in the autumn.
The king returned to Copenhagen on 12 January 1769, bringing with him Johann Friedrich Struensee as royal physician, and later minister in his court. He had met Struensee in Altona during the beginning of his travels. Struensee could apparently handle the king's instability, which was a great relief to the king's advisers, and the king developed a confidence in him.
Caroline Mathilde was unhappy in her marriage, neglected and spurned by the king, and affected by his illness. Struensee encouraged the king to improve his relationship with Caroline Mathilde, and Christian VII showed his attention to her in the form of a three-day birthday party on 22 July 1769.
The court moved to Frederiksborg Palace on 19 November and then back to Christiansborg Castle on 8 January 1772.
Struensee and Caroline Mathilde were both arrested in the middle of the night between 16 January and 17 January, after a masked ball at the royal theatre at Christiansborg Castle. Caroline Mathilde was taken to Kronborg Castle to await her judgement. Struensee and his accomplice Enevold Brandt were executed on 28 April 1772.
Caroline Mathilde was divorced, and deported on board an English frigate to neighbouring Celle, Germany on 28 May. She never saw her children again.
She did not give up hope of returning to Denmark and seeing her ex-husband deposed, but her indiscreet behaviour dismayed her brother, and he was reluctant to have her back in England, even if she had been willing to return.
She died suddenly of scarlet fever at Celle on 10 May 1775.
In 1969 the British writer Norah Lofts published The Lost Queen, a biographical novel of the life of Queen Caroline Matilda.
In 1999 the Swedish writer Per Olov Enquist published The visit of the royal physician (Livläkarens besök), which tells the story of Struensee.
In 2006 the British historian Stella Tillyard published A Royal Affair: George III and his Scandalous Siblings , which includes a long account of Queen Caroline Matilda.