Blum was born in 1872 in Paris to a prosperous, assimilated Jewish family. His father Abraham, a merchant, was born in Alsace. Blum attended the École Normale Supérieure and The University of Paris and became both a Lawyer and literary critic.

While in his youth an avid reader of the works of the nationalist Writer Maurice Barrès, Blum had little interest in politics until the Dreyfus Affair of 1894, which had a traumatic effect on him as it did on many French Jews. Campaigning as a Dreyfusard brought him into contact with the socialist leader Jean Jaurès, whom he greatly admired. He began contributing to the socialist daily, L'Humanité, and joined the Socialist Party, then called the SFIO. Soon he was the party's main theoretician.

In July 1914, just as the First World War broke out, Jaurès was assassinated, and Blum became more active in the Socialist party leadership. In August 1914 Blum became assistant to the Socialist Minister of Public Works Marcel Sembat. In 1919 he was chosen as chair of the party's executive committee, and was also elected to the National Assembly as a representative of Paris. Believing that there was no such thing as a "good dictatorship", he opposed participation in the Comintern. Therefore, in 1920, he worked to prevent a split between supporters and opponents of the Russian Revolution, but the radicals seceded, taking L'Humanité with them, and formed the SFIC.

It also raised the pay, pensions, and allowances of public-sector workers and ex-servicemen. The 1920 Sales Tax, opposed by the Left as a tax on consumers, was abolished and replaced by a production tax, which was considered to be a tax on the Producer instead of the consumer.

Blum was elected as Deputy for Narbonne in 1929, and was re-elected in 1932 and 1936. In 1933, he expelled Marcel Déat, Pierre Renaudel, and other neosocialists from the SFIO. Political circumstances changed in 1934, when the rise of German dictator Adolf Hitler and fascist riots in Paris caused Stalin and the French Communists to change their policy. In 1935 all the parties of left and centre formed the Popular Front. France had not successfully recovered from the worldwide economic depression, wages had fallen and the working class demanded reforms. The Popular Front won a sweeping victory In June 1936. The Popular Front won a solid majority with 386 seats out of 608. For the first time, the Socialists won more seats than the Radicals; they formed an effective coalition. As Socialist leader Blum became Prime Minister of France, the first socialist to hold that office. His first cabinet consisted of 20 Socialists, 13 Radicals and two Socialist Republicans. The Communists won 15 percent of the vote, and 12 percent of the seats. They supported the government, although they refused to take any cabinet positions. For the first time, the cabinet included three women in minor roles, even though women were not able to vote.

On 13 February 1936, shortly before becoming Prime Minister, Blum was dragged from a car and almost beaten to death by the Camelots du Roi, a group of anti-Semites and royalists. The group's parent organisation, the right-wing Action Française league, was dissolved by the government following this incident, not long before the elections that brought Blum to power. Blum became the first socialist and the first Jew to serve as Prime Minister of France. As such he was an object of particular hatred from antisemitic elements.

Blum was briefly Prime Minister again in March and April 1938, long enough to ship heavy artillery and other much needed military equipment to the Spanish Republicans. He was unable to establish a stable ministry; on 10 April 1938, his socialist government fell and he was removed from office.

In foreign policy, his government was torn between the traditional anti-militarism of the French Left and the urgency of the rising threat of Nazi Germany. The government cooperated with Britain and declared war on Germany when it invaded Poland in September 1939. Eight months of Phoney War thereafter, saw little or no movement. Suddenly in the spring of 1940, the Germans invaded France and defeated the French and British armies in a matter of weeks. The British Expeditionary Force evacuated from Dunkirk, taking many French Soldiers along. France gave up, signing an armistice that gave Germany full control over much of France, with a rump Vichy government in control of the remainder as well as of the French colonial empire and the French Navy. The same Parliament that had sponsored the Popular Front program since 1936 remained in power; it voted overwhelmingly to make Marshal Philippe Pétain a dictator and reverse all of the gains of the French Third Republic.

When the Germans occupied France in June 1940, Blum made no effort to leave the country, despite the extreme danger he was in as a Jew and a socialist leader; instead of fleeing the country, he escaped to southern France, but the French ordered his arrest. Blum was imprisoned in Fort du Portalet in the Pyrenees.

His brother René, the founder of the Ballet de l'Opéra à Monte Carlo, was arrested in Paris in 1942. He was deported to Auschwitz where, according to the Vrba-Wetzler report, he was tortured and killed in April 1943.

In April 1943, the occupying Government had Blum imprisoned in Buchenwald in the section reserved for high-ranking prisoners. His Future wife, Jeanne Blum, chose to come to the camp voluntarily to live with him inside the camp. As the Allied armies approached Buchenwald, he was transferred to Dachau, near Munich, and in late April 1945, together with other notable inmates, to Tyrol. In the last weeks of the war the Nazi regime gave orders that he was to be executed, but the local authorities decided not to obey them. Blum was rescued by Allied troops in May 1945. While in prison he wrote his best-known work, the essay À l'échelle Humaine ("On a human scale").

After the war, Léon Blum returned to politics, and was again briefly Prime Minister in the transitional postwar coalition government. He advocated an alliance between the center-left and the center-right parties in order to support the Fourth Republic against the Gaullists and the Communists. Although Blum's last government was very much an interim administration (lasting less than five weeks) it nevertheless succeeded in implementing a number of measures which helped to reduce the cost of living. Blum also served as Vice-Premier for one month in the summer of 1948 in the very short-lived government led by André Marie.

Blum also served as an ambassador on a government loan mission to the United States, and as head of the French mission to UNESCO. He continued to write for Le Populaire until his death at Jouy-en-Josas, near Paris, on 30 March 1950. The kibbutz of Kfar Blum in northern Israel is named after him.