He completed his primary school studies in the Cape Verde archipelago, which was also a Portuguese territory at that time. Later on he would receive training in accountancy.
In the early 1960s, the African Party for the Independence of Guinea and Cape Verde (PAIGC) launched an anti-colonial guerrilla war against the Portuguese authorities. Luís Cabral's rise to leadership began in 1973, after the assassination in Conakry, Guinea, of his half-brother Amílcar Cabral, the noted Pan-African intellectual and founder of the PAIGC. Leadership of the party, then engaged in fighting for independence from Portuguese rule for both Guinea-Bissau (then known as Portuguese Guinea) and for Cape Verde, fell to Aristides Pereira, who later became the president of Cape Verde. The Guinea-Bissau branch of the party, however, followed Luís Cabral.
Following a military coup in April 1974 at Lisbon, the new left-wing revolutionary government of Portugal granted independence to Portuguese Guinea, as Guinea-Bissau, on September 10 that same year. The PAIGC had unilaterally proclaimed the country's independence one year before in the village of Madina do Boé, and this event had been recognized by many socialist and non-aligned member states of the United Nations. Luís Cabral became President of Guinea-Bissau. A program of national reconstruction and development, of socialist inspiration (with the support of USSR, China, but also Nordic countries), began. But some suspicion and instability was present in the party since Amílcar Cabral's death and the independence. Relations with Portugal after independence were relatively good. The Guinean president visited Portugal in 1978 and President Ramalho Eanes visited the former colony the next year, referring to the Luso-Guinean relationship as a model for those Portugal sought to establish with Angola and Mozambique.
Some sections of the party accused Luís Cabral and the other members with Cape Verdean origins of dominating the party. Alleging this, Cabral's Prime Minister and former armed forces commander João Bernardo Vieira organized his overthrow on November 14, 1980 in a military coup. Luís Cabral was then arrested and detained for 13 months.
After the military coup in 1980, he was sent into exile, first in Cuba, which offered to receive him, then (in 1984), in Portugal, where the Portuguese Government received him and gave him measure to live with his family, until his death in 2009.
Shortly after being appointed Prime Minister following the Guinea-Bissau Civil War, Francisco Fadul called for Cabral's return from exile in December 1998. Cabral said in response, in the Portuguese newspaper 24 Horas, that he would be willing to return, but not while Vieira remained in power; Vieira had said that he could not guarantee Cabral's safety, and Cabral said that as a result he feared for his life should he return while Vieira remained president. On October 22, 1999, following Vieira's ouster, coup leader Ansumane Mane invited Cabral to return, giving him a passport marking him as "President of the Guinea Bissau Council of State" while in Lisbon. Cabral was in Bissau in mid-November 1999, and said on the occasion that he did not want to become active in politics again or to rejoin PAIGC.