The place name is probably also of Slavic origin. The village was called Lezowe in 1335, Lessa and Lessaw in 1498, Losske and Lossa in 1533 and Lesse, Lössa and finally Lössau in 1648. Lössau was located on the old trade route to Leipzig and therefore experienced a corresponding economic development. Lössau was a typical roadside village that developed from an original roundabout around the village pond. In addition to agriculture, especially milk production, three historic mills should be mentioned as important businesses, which were used as grinding, malting, oil, tanning and, above all, cutting mills. There are extensive woodlands near the village, the products of which were processed here. In 1896, the toy factory E. Oettel was founded at Lössau railroad station, which produced until 1931.

The Lössau church was built by Heinrich XII. Reuß Jüngerer Linie Schleiz in the years 1754 to 1763. Lössau has been a school since 1862. The school was given a new building in 1902. From the 1990s, however, the children were sent to school in Schleiz. On July 20, 1887, Lössau was given a stop on the Royal Saxon State Railway, whose Schönberg - Schleiz line was completed at the time. This railroad line played an important economic role at the time, especially for the extensive transportation of livestock. Other industrial enterprises worth mentioning are the brush factory established in 1926, the lace production started in 1913 and the production of chipboard. In Lössau there were trades such as bricklaying, carpentry, saddlery and carpentry.

At the end of the 19th century, the master bricklayer Heinrich Rüdiger caused quite a stir in Lössau. After his death in 1899, a walled-in safe was discovered in the cellar of his house and opened in the presence of his heirs and the mayor. Securities amounting to the then almost unimaginable sum of 46,708.74 gold marks came to light. Together with the value of the real estate, the heirs were able to enjoy what is now a sum in the millions. The fact that no taxes were paid on the 46,000 gold marks probably deserves a small mention.