Loeb was born at Mayen in Germany. After studying medicine at Strasbourg, he settled in America (1891) where he held professorships at Bryn Mawr College, Pennsylvania, and the universities of Chicago and California, before becoming a member of the Rockefeller Institute for Medical Research (1910).

Much of Loeb's major research was concerned with plant and animal tropisms (involuntary movements in response to stimuli such as light, water, and gravity); he postulated that these occur not only in primitive animals but also in higher animals, including man (Forced Movements, Tropisms, and Animal Conduct, 1918). He also carried out important work on artificial parthenogenesis, showing that unfertilized frogs' eggs could be induced to divide by altering their environment. Another discovery was that sea-urchin eggs are hatched by the osmotic pressure exerted by various substances dissolved in water.