Lüthi grew up in the Emmental region of Switzerland after being born in Oberdiessbach. He started racing pocket bikes at the age of nine, winning pocket bike championships in 1999 and 2000. He finished second overall in the European 125cc Championship in 2002 and third in the German 125cc series the same year, before making his first 125cc World Championship appearance at the 2002 German Grand Prix.
Lüthi's Grand Prix career gathered momentum when Daniel Epp invited him to join the Elit Grand Prix Team for 2003, scoring his first podium in Barcelona. Progress was interrupted by injuries in 2004, but 2005 proved transformative. Working with Andy Ibbott of California Superbike School during that season, Lüthi scored his first 125cc Grand Prix win at Le Mans and followed it with three more victories, including at Brno. On 6 November 2005, he secured the 125cc World Championship at Valencia, becoming the sixth-youngest person to claim the title, finishing five points ahead of Mika Kallio. His achievement earned him the Swiss Sportsman of the Year award and the Swiss Award in the sport category for 2005.
The following season, Lüthi's team changed their name to Elit — Caffe Latte, and he scored only one win — at the 2006 French Grand Prix — losing his title to Alvaro Bautista.
After the 2006 season, Lüthi moved to the 250cc class with the rebranded Emmi — Caffe Latte team on an Aprilia RSA 250. He achieved podiums in 2008 at the Italian and Dutch Grands Prix but no victories, and finished seventh overall in 250cc in 2009.
When the 250cc category was replaced by Moto2 in 2010, Lüthi remained with the team and found greater consistency, picking up second place at Silverstone and third at Assen that year. He spent the bulk of the following decade as a mainstay of the Moto2 class, consistently scoring points and podiums while becoming the statistically most decorated rider in the category's history across those key metrics.
In August 2017, it was announced that Lüthi would step up to MotoGP for the 2018 season with EG 0,0 Marc VDS, partnering Moto2 rival Franco Morbidelli. The campaign proved unsuccessful — Lüthi did not score a single point in the premier class, with his best result of 16th place recorded at several venues. He returned to Moto2 for 2019, joining Dynavolt Intact GP.
On 19 August 2021, Lüthi announced his retirement from professional racing after the conclusion of the 2021 season — bringing to a close a 19-year Grand Prix career. He transitioned immediately into a team management role, becoming Sports Director of the Prüstel GP Moto3 team and their Junior Team from 2022 onward.
Thomas Lüthi's career represents one of the longest and most enduring in modern Grand Prix motorcycle racing. His 2005 125cc world title at the age of 18 announced him as a major talent, and his subsequent longevity in Moto2 — where he accumulated records that still stand — cemented his place as Switzerland's most significant contribution to Grand Prix racing. Reaching 300 race starts places him in a very small group of riders in the sport's history.