In 1900, Ludwig Von Mises attended the University of Vienna, becoming influenced by the works of Carl Menger. Mises' father died in 1903. Three years later, Mises was awarded his doctorate from the school of law in 1906.

In the years from 1904 to 1914, Mises attended lectures given by Austrian Economist Eugen von Böhm-Bawerk. He graduated in February 1906 (Juris Doctor) and started a career as a civil servant in Austria's financial administration.

After a few months, he left to take a trainee position in a Vienna law firm. During that time, Mises began lecturing on economics, and in early 1909, he joined the Vienna Chamber of Commerce and Industry. During World War I, Mises served as a front officer in the Austro-Hungarian artillery and as an economic adviser to the War Department.

Mises was chief Economist for the Austrian Chamber of Commerce and was an economic adviser of Engelbert Dollfuss, the austrofascist but strongly anti-Nazi Austrian Chancellor. Later he was economic adviser to Otto von Habsburg, the Christian democratic Politician and claimant to the throne of Austria (which had been legally abolished in 1918 following the Great War). In 1934, Mises left Austria for Geneva, Switzerland, where he was a professor at the Graduate Institute of International Studies until 1940.

Mises' 1927 book Liberalism has been largely ignored, except for its comments on fascism. Marxists Herbert Marcuse and Perry Anderson, as well as German Writer Claus-Dieter Krohn, criticized Mises for writing approvingly of Italian fascism, especially for its suppression of leftist elements. In 2009 Economist J. Bradford DeLong and Sociologist Richard Seymour, repeated the criticism.

In 1940 Mises and his wife fled the German advance in Europe and emigrated to New York City in the United States. He had come to the United States under a grant by the Rockefeller Foundation. Like many other classical liberal scholars who fled to the US, he received support by the william Volker Fund to obtain a position in American universities. Mises became a visiting professor at New York University, and held this position from 1945 until his retirement in 1969 – though he was not salaried by the university. Businessman and libertarian commentator Lawrence Fertig, a member of the NYU Board of Trustees, funded Mises and his work.

For part of this period, Mises studied currency issues for the Pan-Europa movement, which was led by Richard von Coudenhove-Kalergi, a fellow NYU faculty member and Austrian exile. In 1947, Mises became one of the founding members of the Mont Pelerin Society.

Economic Historian Bruce Caldwell writes that in the mid-20th century, with the ascendance of positivism and Keynesianism, Mises came to be regarded by many as the "archetypal 'unscientific' Economist." In a 1957 review of his book The Anti-Capitalistic Mentality, The Economist said of Mises: "Professor von Mises has a splendid analytical mind and an admirable passion for liberty; but as a student of human nature he is worse than null and as a debater he is of Hyde Park standard." Conservative commentator Whittaker Chambers published a similarly negative review of that book in the National Review, stating that Mises's thesis that anti-capitalist sentiment was rooted in "envy" epitomized "know-nothing conservatism" at its "know-nothingest."

In 1962, Mises received the Austrian Decoration for Science and Art for political economy at the Austrian Embassy in Washington, D.C.

In a 1978 interview, Friedrich Hayek said about Mises's book Socialism:

Friends and students of Mises in Europe included Wilhelm Röpke and Alfred Müller-Armack (advisors to German chancellor Ludwig Erhard), Jacques Rueff (monetary advisor to Charles de Gaulle), Gottfried Haberler (later a professor at Harvard), Lionel, Lord Robbins (of the London School of Economics), Italian President Luigi Einaudi, and Leonid Hurwicz, recipient of the 2007 Nobel Memorial Prize in Economic Sciences. Economist and political theorist F.A. Hayek first came to know Mises while working as his subordinate at a government office dealing with Austria's post-World War I debt. In 1956, while toasting Mises at a party, Hayek said, "I came to know him as one of the best educated and informed men I have ever known..." Mises' seminars in Vienna fostered lively discussion among established economists there. The meetings were also visited by other important economists who happened to be traveling through Vienna.

Ludwig von Mises was born to Jewish parents in the city of Lemberg, Galicia, Austria-Hungary (now Lviv, Ukraine). The family of his father Arthur Edler von Mises had been elevated to the Austrian nobility in the 19th century (Edler indicates a noble landless family); they had been involved in financing and constructing railroads. Ludwig's mother, Adele (née: Landau), was a niece of Dr. Joachim Landau, a Liberal Party deputy to the Austrian Parliament. Arthur von Mises was stationed in Lemberg as a construction Engineer with the Czernowitz railway company.