Arthur Lasenby Liberty was born in Chesham, Buckinghamshire in 1843. He was employed by Messrs Farmer and Rogers in Regent Street in 1862, the year of the International Exhibition at Kensington in London. By 1874, inspired by his 10 years of service, Arthur decided to start a business of his own, which he did the next year. With a £2,000 loan from his future father-in-law, Arthur Liberty accepted the lease of half a shop at 218a Regent Street with only three staff members.

The shop opened during 1875 selling ornaments, fabric and objets d'art from Japan and the East. Within eighteen months Arthur Liberty had repaid the loan and acquired the second half of 218 Regent Street. As the business grew, neighboring properties were bought and added. 

In 1885, 142-144 Regent Street was acquired and housed the ever-increasing demand for carpets and furniture. The basement was named the Eastern Bazaar, and was the vending place for what was described as "decorative furnishing objects". He named the property Chesham House after the place in which he grew up. The store became the most fashionable place to shop in London and Liberty fabrics were used for both clothing and furnishings. Some of its clientele was exotic, and included famous Pre-Raphaelite artists.

In 1884 Liberty introduced the costume department into the Regent Street store, directed by Edward William Godwin (1833-86). Godwin was a distinguished architect. He was a founding member of the Costume Society in 1882. He and Arthur Liberty created in-house apparel to challenge the fashions of Paris.

During the 1890s Arthur Lasenby Liberty built strong relationships with many famous English designers. Many of these designers practiced the artistic styles known as Arts and Crafts and Art Nouveau (New Art in French), and Arthur Liberty helped develop Art Nouveau through his encouragement of such designers. The company became associated with this new style, to the extent that in Italy, Art Nouveau became known as the Stile Liberty, after the London shop.