Lüthi grew up in the Emmental region of Switzerland and began racing pocket bikes at the age of nine. He won pocket bike championships in 1999 and 2000 before stepping up to circuit racing. In 2002, he finished second overall in the European 125cc Championship and third in the German 125cc series, announcing himself as a serious junior talent.
Lüthi made his 125cc World Championship debut at the 2002 German Grand Prix, finishing 26th. He was invited to join the Elit Grand Prix Team in 2003, managed by Daniel Epp, and scored his first podium with a second place in Barcelona. His 2004 campaign was disrupted by four retirements in a row and four races missed through injury.
The 2005 season brought a breakthrough. Trained by Andy Ibbott of California Superbike School, Lüthi scored his first 125cc Grand Prix win at Le Mans and followed it with three more victories, including one at Brno. On 6 November 2005 at Valencia, he secured the 125cc World Championship title, becoming the sixth-youngest person to do so at the time. He edged Mika Kallio by five points, riding a Honda RS125R. Switzerland voted him Sportsman of the Year in 2005, and he also received the Swiss Award in the sport category.
His 2006 title defence proved difficult. The team rebranded as Elit — Caffè Latte and welcomed Sandro Cortese as a teammate, but Lüthi managed only a single win at the French Grand Prix, surrendering the championship to Álvaro Bautista.
Lüthi moved to the 250cc class in 2007 with a team now renamed Emmi — Caffè Latte, switching to Aprilia machinery with the RSA 250. He recorded limited results across two seasons in the category. In 2008 he reached the podium at the Italian Grand Prix (third) and at Assen (second), but a crash at Brno caused by apparent brake failure ended a promising run. In 2009 he finished seventh overall without a podium.
When Moto2 replaced the 250cc category in 2010, Lüthi remained with the team and adapted well to the new formula. He recorded a second place at Silverstone and a third at Assen, though a collarbone injury complicated that period. He became a consistent frontrunner in Moto2 over the following decade, accumulating what would eventually become the class records for most points scored (1,852) and most podiums (53), along with 18 fastest laps. He spent much of his Moto2 career with the Dynavolt Intact GP team.
On 24 August 2017, it was announced that Lüthi would step up to MotoGP for the 2018 season, partnering Franco Morbidelli at EG 0,0 Marc VDS aboard a Honda RC213V. The campaign was difficult: Lüthi did not score a single championship point, with his best result a 16th place achieved at Losail, Le Mans, Brno, Phillip Island, and Sepang. On 12 August 2018, he announced a return to Moto2 for 2019, joining Dynavolt Intact GP where he replaced Xavi Vierge.
Lüthi announced his retirement from racing on 19 August 2021, effective at the end of that season. He transitioned immediately into team management, becoming Sports Director of the Prüstel GP Moto3 team and their Junior Team from 2022.
His career statistics stand as a testament to longevity and consistency. As one of only nine riders to reach 300 Grand Prix starts, and as the holder of Moto2's all-time points and podium records, Lüthi occupies a unique position in the history of the intermediate class. His 2005 125cc title remains Switzerland's most significant contribution to Grand Prix motorcycle racing.