How to create multiple files and their contents from a list?

Move the second for loop inside the with statement.

Your current code is overwriting your file for each item on listB leaving only the last modified version (i.e. item2 = "3").

for item in listA:
    with open("random{}.txt".format(item), "w") as f:
        for item2 in listB:
            f.write("Lorem ipsum dolor sit amet, consectetur adipiscing elit.")
            f.write("\nLorem ipsum dolor sit amet, consectetur {} adipiscing elit.".format(item2))
            f.write("\nLorem ipsum dolor sit amet, consectetur adipiscing elit.")

You could also keep you current code and open the file in append mode ('a'), but this would be inefficient to close the file just to reopen it.

Edit: only repeat/update middle line

for item in listA:
    with open("random{}.txt".format(item), "w") as f:
        f.write("Lorem ipsum dolor sit amet, consectetur adipiscing elit.")
        for item2 in listB:
            f.write("\nLorem ipsum dolor sit amet, consectetur {} adipiscing elit.".format(item2))
        f.write("\nLorem ipsum dolor sit amet, consectetur adipiscing elit.")

Edit 2: parallel looping over listA and listB

Use zip

for itemA, itemB in zip(listA, listB):
    with open("random{}.txt".format(itemA), "w") as f:
        f.write("Lorem ipsum dolor sit amet, consectetur adipiscing elit.")
        f.write("\nLorem ipsum dolor sit amet, consectetur {} adipiscing elit.".format(itemB))
        f.write("\nLorem ipsum dolor sit amet, consectetur adipiscing elit.")

The problem is with the flag you are using. Right now you are using "w" flag to write to a file. This will overwrite the file if it already exist. If you use "a" (appending flag), it solves your problem. It appends to existing files and if the file does not exist it creates it.

with open("random{}.txt".format(item), "a") as f

Also, you can make your code more efficient by moving the inner loop inside the with statement. This way you only open the file once per each outer loop.

listA = ["one", "two", "three"]
listB = ["1", "2", "3"]

for item in listA:
    with open("random{}.txt".format(item), "w") as f:
        for item2 in listB:
            f.write("Lorem ipsum dolor sit amet, consectetur adipiscing elit.")
            f.write("\nLorem ipsum dolor sit amet, consectetur {} adipiscing elit.".format(item2))
            f.write("\nLorem ipsum dolor sit amet, consectetur adipiscing elit.")