Löb Strauß was born in Buttenheim, Bavaria, to Hirsch Strauß and his second wife, Rebecca Haas Strauß. He grew up in a Jewish family in a small rural town, experiencing a traditional upbringing and likely facing the challenges and limitations imposed on Jewish communities in 19th-century Germany. This early life shaped his values and instilled in him a strong work ethic, qualities that would prove invaluable in his later endeavors.

Following his father's death and the lure of opportunity, Löb, along with his mother and two sisters, immigrated to New York City to join his older half-brothers, Jonas and Louis, who had already established a dry goods business. He anglicized his name to Levi and began working in the family business, learning the fundamentals of commerce and gaining valuable experience in trading and retail.