From Diablo Wiki
Life Steal (or Life Leech) is an item affix in Diablo 3 that heals characters for a % of the damage they deal to valid targets with direct attacks or spells. Life Steal is one of the most powerful affixes in the game and items with good stats and Life Steal are very valuable. Life can only be stolen from monsters or other players and their pets in PvP. Characters can not generate Life Steal from hitting destructibles or other inanimate targets.
Life Steal is fairly hard to come by in Diablo 3 classic; It can only occur on weapons and Barbarian-only Mighty Belts, and can also be obtained via a variety of active and passive skills.
- See also Life on Hit which grants X amount of healing for each "hit" on a valid target.
 Reaper of Souls Removal
Life Steal is set for huge changes in the expansion. As revealed via datamining, not only are almost all skills from D3V that granted life steal being changed in RoS, but the property will no longer be found on end game weapons, and will actually become non-functional once a character reaches max level:
Life Steal is less effective when you are higher level.
- At level 60, Life Steal gains a 0.10x multiplier.
- At level 70, Life Steal no longer functions.
This change is not being made in a vacuum, and it comes with a suite of other game modifications including the removal of spiky damage and the modification/improvement of many other means of healing. More details should be made available as more official Reaper of Souls information is released.
 Difficulty Level Penalties
The value of Life Steal is diminished on higher difficulty levels, to offset the rising DPS that would otherwise turn every hit into a full heal. The figures show how much of a character's total life steal functions on each difficulty level; e.g. a character with 10% life steal on Inferno would only get 2% in actual function.
- Normal: 100%
- Nightmare: 70%
- Hell: 40%
- Inferno: 20%
 Diablo 3's Health System
The Diablo 3 developers recognized that life and mana steal were overpowered and overly popular in Diablo 2, and designed Diablo 3 to be more of a balanced difficulty with fewer "spiky" damage types. That was the goal, anyway.
There are skills that have life leech ability, and literal life leech affixes. They’re not as crazy as they were in Diablo II. --Diablo
The actuality is that as of v1.08 most high level characters have good enough gear that they can use LoH and LS to maintain more or less full health at all times without the benefit of health orbs, and the developers often speak of this is a broken system and one they hope to repair in the future. Wyatt Cheng in July 2013:
 Life Steal Sources in Diablo III
Upon launch life steal was hard to come by in Diablo 3, for all classes except the Barbarian. Life steal could only be found on weapons and on Barbarian-only Mighty Belts, with varying values.
- Mighty Belts: 1-3% Life Steal
- One-handed weapons: 1-3% Life Steal
- Two-handed weapons: 1-6% Life Steal
Many skills provide short term bursts of Life Steal as well, though only one passive turns it on full time, and again that's only for the Barbarian:
 Life Steal During Development
No socketed gems can provide Life Leech, though during development this property was present on Sapphires. (Sapphires were not present in the game upon release.)
Several skills were seen providing Life Leech during development, though these were most changed by release.