Loewi was born at Frankfurt am Main in Germany and qualified in medicine at the University of Strasbourg before taking up professorships in physiology and pharmacology at Vienna and Graz Universities. For a time he worked under Ernest Starling in London, and in 1940 emigrated to America where he became research professor at the New York University College of Medicine.

Loewi's most important work was concerned with nerve action in vertebrate animals, demonstrating, for example, that chemical reactions are involved in nerve impulses. In 1921 he discovered that certain chemical substances are released when the nerves of a frog's heart are electrically stimulated. Loewi's vagus material (thus named because it was obtained by stimulation of the vagus nerve) was subsequently shown by Henry Dale to be acetylcholine. It can be used to stimulate the activity of another heart without the need for nervous activity. Loewi and Dale shared the Nobel Prize for physiology or medicine in 1936 for their work in this field.