Born in Germany to Polish Jewish survivors of the Shoah (Holocaust) who were Chasidim, Yaakov Litzman grew up and was educated in the United States. After completing his secondary education at the age of 17, he was sent to continue his yeshiva education in Israel.
Litzman's was affiliated with Agudat Yisrael, a small but influential political party identified with the Chassidic wing of ultra-orthodox political life in Israel, where he served as Principal of the Chasidic Bet Yaakov High School in Jerusalem, part of the Chinuch Atzmai (Independent Schools) system, which the party controls. As a member of the Gur Chasidic sect, he became close to the Gerrer Rebbe, Rav Simcha Bunim Alter and later entered Israeli politics at his behest, relinquishing his US citizenship to stand for the 15th Knesset election in 1999. The Gur sect is dominant in Agudat Yisrael and the later United Torah Judaism, and Litzman remains politically aligned with the present Gerrer Rebbe, Rav Yaakov Aryeh Alter. The sect also controls the chareidi Hamodi'a newspaper.
Litzman has served in the 15th through 17th Knessets and became UTJ Party Chairman in the 16th Knesset, when the two parties merged. Since entering the Knesset, he has served as Chairman of the Knesset Finance Committee, as well as a member of the Internal Affairs and Environment Committee, twice on the State Control Committee, as well as on several other committees related to social legislation, the Defense budget, and social lobbies.
Litzman's party role and power base are focal: while there are other Chassidic sects represented in UTJ and this leads to a great deal of political in-fighting, the Gur sect remains dominant and has succeeded in maintaining unification, primarily to retain supremacy against the Lithuanian faction within the party (the former Degel Hatorah party) but equally against external threats – to reinforce the party in national elections, to promote agreed candidates in the elections to the Chief Rabbinate, to postpone or vote down controversial Knesset legislation on personal status, or carry amendments to government financial legislation and regulation.