Li Fang-Kuei was born on 20 August 1902 in Guangzhou during the final years of the Qing dynasty to a minor scholarly family from Xiyang, a small town in Shanxi roughly 50 kilometers (31 mi) south of Yangquan.

Following the completion of his PhD, Li traveled to Europe during 1928–1929 with letters of recommendation from Franz Boas, and visited linguists there including Walter Simon.

Li also spent 3 months in 1929 in Canada's Northwest Territories, living on an island in the middle of the Mackenzie River conducting fieldwork on the Hare language.

[1] After his fieldwork on Hare, in 1929 he returned to China and, along with Y. R. Chao and Luo Changpei, became a researcher at the Institute of History and Philology (歷史語言研究所; Lìshǐ yǔyán yánjiūsuǒ) of the Academia Sinica then located at Beijing.

From this point on, he performed field studies of several Tai languages, including the Longzhou and Wuming dialects spoken by the Zhuang people, while at the same time conducting deep investigations into Old Chinese and Tibetan.