The increasing Jewish population in the capital of Luxembourg required the construction of a new synagogue. In the census in 1890, the number of Jewish people living in the country exceeded 1000 people. Nearly half of them were living in the capital. The former synagogue did not have a sufficient capacity and did not meet basic security measures for the growing number of people. The Jewish community organized a collection in which about 50,000 francs were raised, the rest was collected with the support of the city of Luxembourg. The whole period of construction was accompanied by a heated discussion about the amount of redistributed financial support.
The synagogue had room for 300 people and was opened on September 28, 1894 by the Chief Rabbi Isaac Blumenstein and members of the government and communal council. Jews used to live in a diverse neighbourhood and according to testimonies they felt to be fully integrated into Luxembourgish society. Jewish children attended non-Jewish schools and Jewish people did not have to live in separated districts. Besides regular school, Jewish children went to the cheder, a special Jewish school organized twice a week at the synagogue. In May 1941, the synagogue was shut down for the public and gradually demolished until 1943.