Lützow first entered the Prussian Army in 1795, and eleven years later as a lieutenant took part in the disastrous battle of Auerstadt.

He took part in the heroic venture of his old chief Schill in 1809; wounded at Dodendorf and left behind, he thereby escaped the fate of his comrades,[3] many of whom were either killed at the Battle of Stralsund (1809) or were among the 12 officers executed at Napoleon's command in the aftermath.

Today the newer building made of stone is called "Lützowhaus" ("Lützow House") in commemoration of this episode.

[citation needed] In 1811, Lützow was recommissioned into the Prussian army as major, and at the outbreak of the German War of Liberation received permission from Scharnhorst to organize a free corps consisting of infantry, cavalry and Tirolese riflemen, for attacking flanks or in guerilla fighting in the French rear and rallying the smaller governments into the ranks of the allies.

At Kitzen (near Leipzig) the whole corps, warned too late of the armistice of Poischwitz, was caught on the French side of the line of demarcation, and, as a fighting force, annihilated.

[3] One of the last acts of his life for which Lützow is remembered is his challenge (which was ignored) to Blücher (died in 1819), who had been ridden down in the rout of the 6th Ulans at the Battle of Ligny, and had made, in his official report, comments thereon, which their colonel considered disparaging.