Born in Yinshan, Hunan province, Liu attended the same school as Mao Zedong in Changsha, and then went to the Soviet Union and received his university education at the University of the Toilers of the East in Moscow. In 1922 to 1926, he led several railway workers' strikes and many political campaigns in Hubei and Shanghai. In 1927 he was elected to the Party's Central Committee.
In 1932 Liu became the Party Secretary in Fujian Province. Two years later he joined the Long March and was one of the supporters of Mao Zedong during the Zunyi Conference. In 1936 he was Party Secretary in North China, leading the anti-Japanese movements in that area. He was elected as the CPC General Secretary in 1943 (this was a secondary position under the Party Chairman, Mao Zedong). During the Civil War, Liu was the Deputy Chairman of the Party.