Luther has consistently been recognized as a leader in liberal arts studies. In the 2004 and 2005 editions of the U.S. News & World Report Best Colleges Rankings, Luther was ranked in the top tier of national liberal arts colleges. It was ranked in the second tier in 2003 and the third tier in 2002.

In 2004 Luther was also named one of the Colleges of Distinction , a list of schools emphasizing student engagement, strong teaching, a vibrant community and successful outcomes. It was also listed as one of the 170 colleges in the "Best in the Midwest" list by the Princeton Review.

Among the other liberal arts colleges in Iowa, Luther usually ranks with Grinnell College and Cornell College as the most selective institutions of its type in the state.