Strauss was born to a Jewish family as Loeb Strauss in Buttenheim in Franconia, Bavaria, then part of the German Confederation. In 1847, Strauss, his mother and two sisters moved to New York City to join his brothers, Jonas and Louis Loeb, in their dry goods business. By 1850 he had adopted the name "Levi Strauss."

In 1853, Strauss moved to the bustling and noisy San Francisco, California, where the rush for gold was still in high gear, Levi expected that the mining camps would welcome his buttons, scissors, thread and bolts of fabric that he had brought with him, along with the yards of canvas sail cloth that he intended to sell for tent-making and as covers for the the Conestroga wagons that were to be dotted next to every stream and river in the area.

It was here on California Street where he and his brother-in-law David Stern opened a dry goods wholesale business, Levi Strauss & Co., selling to small stores. Strauss observed that the work clothes worn by gold prospectors and miners did not stand up well under the torturous work in mine shafts, digging in the dirt and grime. Strauss developed the concept of durable canvas pants. Initially, they were not very comfortable to wear but were very durable. Later, Strauss discovered denim and produced even more popular and comfortable apparel.

Levi was often found leading a pack-horse, which was heavily laden with his merchandise, directly into the mining camps found throughout the region. The story goes that both prospectors and miners, often complaining about the easily torn cotton "britches" and pockets that "split right out" is what gave Levi the idea to make a rugged overall trouser for the miners to wear. They were fashioned from bolts of brown canvas sailcloth with gold ore storing pockets that were nearly impossible to split. Levi exhausted his original supply of canvas, as the demand grew for his hard-wearing overalls, and so Levi switched to a sturdy fabric which was called serge, that was made in Nimes, France. Originally called serge de Nimes, the name was soon shortened to denim.

In 1872, Levi received a letter from Jacob Davis, a ] Nevada tailor. Davis who was one of Levi Strauss' regular customers; who purchased bolts of cloth from the company to use for his own business. In this letter, Davis told Levi about the interesting way in which he made pants for his customers: he placed metal rivets at the points of strain - pocket corners and on the base of the fly. As he didn't have the money to patent his process he suggested that Levi pay for the paperwork and that they take out the patent together.

On May 20, 1873, Strauss and Jacob Davis received United States patent #139121 for using copper rivets to strengthen the pockets of denim work pants. Levi Strauss & Co. began manufacturing the first of the famous Levi's brand of jeans in San Francisco.