During Emperor Muzong's reign
As of the ascension of reign of Emperor Xianzong's son Emperor Muzong, Li Shen was serving as You Shiyi (右拾遺), a low-level advisory official at the legislative bureau of government (中書省, Zhongshu Sheng), when Emperor Muzong also made him an imperial scholar (翰林學士, Hanlin Xueshi). He and his colleagues Yuan Zhen and Li Deyu were known for their talent and friendship. He was also promoted, in his legislative bureau position, from You Shiyi to the higher rank of You Bujue (右補闕). In 821, he was made Sixun Yuanwailang (司勛員外郎), a low-level official at the ministry of civil service affairs (吏部, Libu), and put in charge of drafting edicts. He was also involved in an incident that was traditionally considered a cause of the later Niu-Li Factional Struggles. Both Li Shen and the former chancellor Duan Wenchang had submitted a list of examinees that they hoped would be passed to Qian Hui (錢徽), one of the officials in charge of the examinations that season, but once the results were published, the examinees that Duan and Li Shen recommended did not pass, while those who passed included the several relatives of other officials – Zheng Tan's brother Zheng Lang; Pei Du's son Pei Zhuan (裴譔); Li Zongmin's son-in-law Su Chao (蘇巢); and Yang Yinshi (楊殷士), brother to the other official in charge of the examinations that year, Yang Rushi (楊汝士). Duan complained to Emperor Muzong that the examinations that year were not fair. When Emperor Muzong consulted imperial scholars, several imperial scholars who were political enemies of Li Zongmin, including Li Deyu and Yuan, and Li Shen, all agreed with Duan. Emperor Muzong thus ordered a reexamination, while demoting Qian, Li Zongmin, and Yang Rushi, along with 10 examinees who passed based on perceived influence. When Qian's friends subsequently suggested that he submit Duan's and Li Shen's letters trying to influence the examinations to the emperor to show that they were the ones trying to influence results, Qian, who believed that revealing these private letters was inappropriate, burned them. (Later historians have typically regarded Li Shen as a leader of the Li Faction – named after Li Deyu, not him – during the Niu-Li Factional Struggles.)
In 822, Li Shen was made Zhongshu Sheren (中書舍人), a mid-level official at the legislative bureau, and continued to be in charge of drafting edicts. Soon thereafter, Yuan was made chancellor but only served a short time before he was removed, allegedly at the machination of his fellow chancellor Li Fengji. It was further said that Li Fengji wanted Niu Sengru to be chancellor, and believed that Li Deyu and Li Shen would oppose, and therefore had Li Deyu sent out of Chang'an to serve as the governor (觀察使, Guanchashi) of Zhexi Circuit (浙西, i.e., Zhenhai). However, he could not think of a way to remove Li Shen initially. In 823, the position of deputy chief imperial censor (御史中丞, Yushi Zhongcheng) was open, and Li Fengji recommended Li Shen for the post – and then manufactured a conflict between Li Shen and Han Yu the mayor of Jingzhao Municipality (京兆, i.e., the Chang'an region). (Per regulations, to honor the censors, the mayor of Jingzhao was supposed to pay tribute by visiting the Office of the Imperial Censors, but as Han was bestowed an honorary title as chief imperial censor, Li Fengji ordered that he did not have to carry out that regulation, leading to mutual accusations between Li Shen and Han of disrespect.) Li Fengji thus reported to Emperor Muzong that the two could not work with each other. As a result, Emperor Muzong made Han the deputy minister of defense (兵部侍郎, Bingbu Shilang) and Li Shen the governor of Jiangxi Circuit (江西, headquartered in modern Nanchang, Jiangxi). However, when Han and Li Shen went to visit Emperor Muzong to thank him for the commissions, he questioned them as to the nature of their conflict, and realized that Li Fengji had manufactured it. He thus kept Li Shen at Chang'an as the deputy minister of census (戶部侍郎, Hubu Shilang).