It is not known when Li Xilie was born, but it is known that his family was from Yan Prefecture (燕州, in modern Siping, Jilin), and that his father's name was Dading (大定).
Li Xilie was supported by the soldiers, and he took this opportunity to plot a mutiny with his colleague Ding Gao (丁暠).
He made Li Xilie prefect of Huaixi's capital Cai Prefecture (蔡州) and acting military governor (nominally serving under Emperor Daizong's own son Li Zao (李造) the Prince of Xin), but stripped the circuit of Bian (汴州, in modern Kaifeng, Henan) and Ying (潁州, in modern Fuyang, Anhui) Prefectures, transferring them to Yongping Circuit (永平) under Li Mian's command, moving Yongping's headquarters to Bian Prefecture.
Li Xilie subsequently drew favors from Emperor Dezong by repeatedly suggesting to Emperor Dezong, who had wanted to wipe out the de facto independence of several circuits — Pinglu (the original territory of which had been abandoned and whose headquartered had moved to modern Tai'an, Shandong), ruled by Li Zhengji; Weibo (魏博, headquartered in modern Handan, Hebei), ruled by Tian Yue; Chengde (成德, headquartered in modern Shijiazhuang, Hebei), ruled by Li Baochen; and Shannan East (山南東道, headquartered in modern Xiangfan, Hubei), ruled by Liang Chongyi — that he be allowed to attack Liang and take Shannan East Circuit back for the imperial government.
Nevertheless, Emperor Dezong, not wanting to take any chances, effectively gave Liang the choice of submission or fight by issuing an order promoting him but summoning him to the capital Chang'an.
However, he was defeated at Siwang (四望, in modern Xiangfan) and retreated back to Shannan East's capital Xiang Prefecture.
Emperor Dezong granted Li Xilie the honorary chancellor designation of Tong Zhongshu Menxia Pingzhangshi (同中書門下平章事).
After Li Xilie's victory over Liang, instead of turning Shannan East over to imperial authority, he began to act as if it were his private domain.
However, Li Xilie then claimed several titles that had not been granted him by Emperor Dezong — the supreme commander of the armed forces, Taiwei (太尉, one of the Three Excellencies), and the Prince of Jianxing.
His subsequent attempts to expand, however, were repelled by Tang generals Geshu Yao (哥舒曜) and Li Gao (李皋) the Prince of Cao, and his campaign stalled.
For the next several months, he continued to engage imperial troops and raid the surrounding prefectures, but did not undertake any substantial maneuvers to expand.
In fall 783, soldiers of Jingyuan Circuit (涇原, headquartered in modern Pingliang, Gansu), at Chang'an at the time in preparation for deployment to battle Zhu, Tian, Wang, and Li Na, mutinied, forcing Emperor Dezong to flee to Fengtian (奉天, in modern Xianyang, Shaanxi).
He forcibly conscripted civilians to participate in the siege and, when they could not complete the filling-up of the moat around Bian Prefecture on time, buried them alive, referring to them as "wet wood.
Li Xilie refused, however, and declared himself the emperor of a new state of Chu and making Daliang (i.e., Bian Prefecture) his capital.
After Li Xilie declared himself the Emperor of Chu, he sent emissaries to Chen Shaoyou and Zhang Jianfeng the prefect of Shou Prefecture (壽州, in modern Lu'an, Anhui), trying to get them to formally submit.
Meanwhile, when he subsequently had difficulty in capturing Chen Prefecture (陳州, in modern Zhoukou, Henan), Li Cheng openly turned against him and resubmitted to Tang.
Li Xilie was able to capture Deng Prefecture (鄧州, in modern Nanyang, Henan) in spring 785, but made no major gains thereafter.