Lüth joined the "Reichsmarine" in 1933. After a period of training on surface vessels, he transferred to the U-boat service in 1936. In December 1939 he received command of , which he took on six war-patrols. In June 1940 he took command of for two patrols. In October 1940 he transferred again, this time to the ocean-going submarine for five war-patrols. After two patrols on , the second being his longest of the war, he was awarded the Knight's Cross of the Iron Cross with Oak Leaves, Swords and Diamonds. He was the first of two U-boat commanders to be so honored during World War II, the other recipient being Albrecht Brandi.