Louis was born in Saarbrücken as the second child and first son of William Henry of Nassau-Saarbrücken and his wife Princess Sophie of Erbach-Erbach.

He largely continued his father's economic policies, but was increasingly subject to financial constraints, so that he had to mortgage the Lordship of Jugenheim to the principality of Nassau-Usingen from 1769 until 1777.

Since his financial position was still tight, Louis moved his seat of government from the palace in Saarbrücken to his smaller hunting lodges in the surrounding area, such as Schloss Jägersberg.

On 30 October 1766 Louis married at Schwarzburg Castle to Princess Wilhelmine of Schwarzburg-Rudolstadt (1751–1780).

The marriage was an unhappy one, and Wihelmine retreated to Halberg Castle, where she raised their son: Outside his marriage, Louis fathered two illegitimate children with Baroness Amalie Frederike of Dorsberg, Frederika Louisa (1771), who married François Leclerc d'Alteville, and Louis Charles Philip (1774-1871).