In 1793 there were 11 Jews in Lodz; by 1809 (when the city was under Prussian rule) the number had risen to 98. A community was organized at that time and a wooden synagogue erected which was renovated in subsequent years. After 1820 (under Russian rule) Lodz became an important industrial center and consequently the Jewish population increased rapidly, until the community became the second largest in independent Poland. Wishing to develop the textile industry in Lodz, the Russian government invited German weavers to settle on very favorable terms. To avert the possibility of Jewish competition, the Germans insisted that the same limitations on Jewish settlement as applied in Zgierz should prevail in Lodz. According to these restrictions, Jews were not allowed to settle and acquire real property, nor were they allowed to sell liquor; only those who had previously kept inns were allowed to continue to do so without a special permit. However, the Jews were largely successful in preventing the Zgierz limitations being applied. When the local authorities planned the town, they set aside the two streets near the market, Walburska and Nadrzeczna, for the Jews. In 1825 they declared that as from July 1, 1827, Jews would be permitted to acquire building sites, to build, and to live on the southern side of the Podrzeczna and Walburska streets and the market only. The only Jews allowed to settle outside this quarter were those who established factories employing Jewish workers, wholesale merchants, members of the liberal professions who built houses, and two families who each possessed 20,000 zlotys. All Jews granted exceptional residence rights had to know Polish, French, or German, and their children over the age of seven had to attend general schools along with non-Jewish children. They were also forbidden to wear the traditional Jewish dress. For a time the authorities continued to harass even those Jews who fulfilled all these conditions. Anxious to eliminate competition from the growing number of Jewish weavers, the German textile workers pressed for the expulsion of the Jews. From 1832 Samuel Ezekiel Salzmann led the battle to extend the rights of Jewish settlement. As the number of Jews continued to grow he built many houses to alleviate the overcrowding and rising rents in the Jewish quarter. In 1848 the czar abolished the limitations on Jewish settlement in Polish cities. By decrees of 1861 and 1862 the concept of a specific Jewish quarter in Lodz was finally abolished. Jews settled throughout the city, although many of them continued to be concentrated in the former Jewish quarter, the "Altstadt." A synagogue was erected on Wilki Street, outside the old quarter. Large numbers of Jewish craftsmen, peddlers, and factory workers were concentrated in the suburb of Balut (Baluty).

Throughout the 19th century and up to 1939 Jews were active in much of the trade in Lodz, especially in supplying raw materials for the textile industry. Wholesale and retail traders, agents, and brokers formed over one third of the Jewish earners in Lodz. In the 20th century Jews entered industry on a considerable scale; by 1914, 175 factories (33.3% of the total) were owned by Jews; 150 of these were textile mills. Jews also owned 18,954 small workshops (27.7%); 18,476 of them textile enterprises. Of the 27,385 Jewish workers (32.9% of the labor force), 26,845 were employed in textile industries. Thus the majority of Jewish enterprise and workers was employed in the small workshops of the Jewish textile industry. Jewish mills produced mainly cotton although there were some woolen and linen mills. The most prominent industrialists were PoznaGski, Hayyim Jacob Wiclicki, Asher Cohen (Oskar Kohn), the brothers Ettingon, Jacob Kastenberg, and Tuvia Bialer.

The official enactments against and intrusions into Jewish communal institutions from the 1820s had little effect in Lodz. The community maintained its autonomy in difficult circumstances. With the official recognition of Jewish communal autonomy in independent Poland the first democratic elections for the community council of Lodz were held in 1924; seven of the members were Hasidim of Aleksandrow, six Zionists and Mizrachi, three Bund, 11 Agudat Israel, one Po'alei Agudat Israel, two representing the craftsmen, two left Po'alei Zion, one Folkspartei, and one each from two Communist lists. The first chairman was the Zionist Dr. Uri Rosenblatt. In 1931 the authorities dissolved the community council and announced new elections. The results were: one Po'alei Agudat Israel, four Zionists, 12 Agudat Israel, two Hasidim of Aleksandrow, one Folkspartei, one representing the small tradesmen, and one each of the four leftist lists. Leib Minzberg of Agudat Israel was elected chairman, a position he occupied until the Holocaust. The community maintained a kosher slaughterhouse, a mikveh, and a talmud torah for the poor, and collaborated with T.O.Z. and other charitable organizations. The most prominent was Gemilut Hasadim (Pol. DobroczynnocB), founded in 1899 by Jewish philanthropists such as Israel PoznaGski as a roof organization for many charitable societies. Rabbis of Lodz included Mendel Wolf ha-Kohen Jerozolimski (1825–32) and Ezekiel Nomberg (1832–56), a Kotsk Hasid who was opposed by many in the community. (His great-grandson was the Yiddish writer Hirsch David Nomberg.) With the growth of Jewish Lodz, the rabbinical seat gained in importance. After a heated election campaign, Moses Lipshitz, also a Kotsk Hasid, was chosen in 1857. He was followed by the famous Lithuanian rabbi, Elijah Hayyim Meisel (1873–1912), who enhanced the stature of the office by becoming the recognized leader of the Jews of Lodz. His successor was Eliezer Leib Treistman, a Gur Hasid, and former rabbi of Radom. After Treistman's death in 1920, because of disagreement between the parties, no other community rabbi was elected. Last of the Reform synagogue preachers and rabbis was Markus (Mordecai) Braude, the founder of the Hebrew schools network (see below).