He joined the newly founded Institute for Social Research in 1926 and quickly became its leading expert on the sociology of literature and mass culture as well as the managing editor of the journal it launched in 1932, the Zeitschrift für Sozialforschung.
Heterodox and independent Marxists, open to new intellectual currents such as psychoanalysis, and predominantly Jewish, the institute's members swiftly fled Germany when Adolf Hitler came to power in 1933.
Although Horkheimer, Adorno, and Friedrich Pollock returned to Frankfurt to reestablish the institute after the war, Löwenthal, like former members Herbert Marcuse, Franz Neumann, Otto Kirchheimer, and Erich Fromm, chose to remain in the United States.
As two of its participants, Jim Stockinger and Terry Strathman, remember it, the seminar produced a remarkable “cross-generational dialogue,” whose focus on literature “was particularly liberating” for sociologists unaccustomed to literary analysis.
The extensive interviews he gave in 1989 to another German interlocutor, Frithjof Hager, dealt with postmodernism and other contemporary themes; they stimulated a collection of responses by European and American scholars published in honor of his ninetieth birthday as "Geschichte Denken: Ein Notizbuch für Leo Löwenthal" by the Reclam Verlag of Leipzig.
An early supporter of the Free Speech Movement, but troubled by the excesses that followed, he was a leading member of the faculty committee chaired by Charles Muscatine that produced the widely admired report published as Education at Berkeley.