Influenced by the writings of Claude Montefiore she took up the cause of Liberal Judaism and was one ol the small group that secured for it a place in England. She played a leading role in the foundation in 1902 of the Jewish Religious Union, which led to the establishment of a separate religious movement represented by the Liberal Jewish Synagogue.
The first rabbi of the new synagogue was Israel I. Mattuck, under whose direction it espoused the radical version of Reform Judaism then in vogue in the United States. Lilian Montagu gave unstinting support to the rabbi, and her religious activities followed his viewpoint. She was a regular preacher at services of the Liberal synagogue and ministered to the affiliated synagogues that she promoted.
Through Montagu the World Union was particulartly helpful to Liberal rabbis displaced by conditions in Europe. Her published writings include novels, stories, prayers, and religious pamphlets, The Faith of a Jewish Woman and My Club and incorporate autobiographical material.