Leopold I was born in Detmold the son of Simon August, Count of Lippe-Detmold (1727–1782), and his second wife, Princess Leopoldine of Anhalt-Dessau (1746–1769).

He received his education in Dessau, and when he reached 18 he went to study at the University of Leipzig.

In 1790, a mental disorder was diagnosed, and he was incapacitated by the Imperial Chamber Court; in 1795, the guardianship was conditionally lifted after an improvement occurred.

He died in Detmold and was succeeded as Prince by his eldest son, who became Leopold II.

He was married to Pauline Christine of Anhalt-Bernburg (23 February 1769 – 29 December 1820), daughter of Frederick Albert, Prince of Anhalt-Bernburg, and Louise Albertine of Schleswig-Holstein, on 2 January 1796 in Ballenstedt.