He was born at Bozzolo, the son of Gianfrancesco Gonzaga and Antonia del Balzo. At his father's death, he received parts of the family lands including Rodigo and, together with his brother Pirro, Gazzuolo, Sabbioneta, Pomponesco and Dosolo. The other two sons, Federico (1484-1527) and Gianfrancesco (who died in his youth), received Bozzolo, Rivarolo and Isola Dovarese, while San Martino was to be shared among all the brothers.
Ludovico was sent by his father at the court of king Charles VIII of France; later, he received by emperor Maximilian I the right to mint coins at Sabbioneta and Bozzolo. In 1509 he took part in the Siege of Padua. One year later he defended Verona and obtained the title of governor of that city. In 1511, at the death of his uncle Ludovico Gonzaga, bishop of Mantua, he received the fiefs of Ostiano and Castel Goffredo, causing some strife with his relatives of the main Gonzaga branch of Mantua. In 1515 he was hired as commander by Pope Leo X and one year later he was under Francesco II Gonzaga of Mantua. In 1517 he bought, for 20,000 ducats, the fief of Casalmaggiore, but after a siege he was forced to surrender it to the Sforza.