A strong supporter of the Enlightenment, Leopold undertook numerous reforms in his principality and made Anhalt-Dessau one of the most modern and prosperous of the small German states.

After having lost both parents in 1751 (his mother on 20 April and his father on 16 December), the eleven-year-old Leopold inherited Anhalt-Dessau under the regency of his uncle, Prince Dietrich.

His numerous reforms in the areas of education, health care, social services, roads, agriculture, forestry, and industry made Anhalt-Dessau one of the most modern and prosperous of the small German states.

He received the title by paying a considerable sum of money to the Emperor shortly before the dissolution of the Holy Roman Empire in 1806, just as the prince of Anhalt-Bernburg had done before him.

In Charlottenburg on 25 July 1767 Leopold married his cousin Louise Henriette Wilhelmine (b. Różanki, Brandenburg, 24 September 1750 – d. Dessau, 21 December 1811), daughter of Frederick Henry, Margrave of Brandenburg-Schwedt, by his wife Leopoldine Marie of Anhalt-Dessau, a sister of his father.