Lyle was born in DuBois, Pennsylvania on July 22, 1944, but grew up in nearby Reynoldsville. His father was a carpenter and contractor, and his mother was a seamstress at a coffin factory. He attended Reynoldsville High School where he played varsity football and basketball. During the spring of his junior year, he began playing American Legion baseball for the DuBois team because neither his high school nor Reynoldsville fielded an organized baseball squad.

He once struck out 31 batters while pitching 14 of 17 innings in a state tournament game for DuBois. At the time, his pitching repertoire consisted of a fastball, curveball and changeup. He was brought in for a tryout with the Pittsburgh Pirates alongside Bruce Dal Canton. The Pirates only signed the latter after seeing that the speed of Lyle's pitches was no match for Dal Canton's. Lyle did succeed in catching the attention of George Staller who was a scout for the Baltimore Orioles at the time. Lyle signed with the ballclub as an amateur free agent on June 17, 1964.

He spent the opening half of his first professional campaign in 1964 with the Bluefield Orioles. He appeared in seven games, three out of the bullpen. It was the first time he was used as a reliever, an idea which he suggested to manager Jim Frey. Later that season, he would earn a promotion to the Fox Cities Foxes, where he was used exclusively as a starting pitcher in six matches for the eventual Midwest League champions.

Lyle never played a game for the Baltimore Orioles. He was selected by the Boston Red Sox in the first-year draft on November 30, 1964. He progressed up the Red Sox farm system as a relief pitcher, with stops in Winston-Salem in 1965, Pittsfield in 1966 and Toronto in the first half of 1967. It was during his time at Pittsfield that he picked up the slider, a pitch that was introduced to him by Ted Williams at spring training prior to that season. Lyle recalled, "He told me it was the best pitch in baseball because it was the only pitch he couldn't hit even when he knew it was coming." The slider became the most successful pitch in his repertoire.

He was called up to Boston after Dennis Bennett was sold to the New York Mets on June 24, 1967. Lyle pitched two scoreless innings to close out a 4–3 Red Sox loss to the California Angels in his major-league debut at Anaheim Stadium on July 4. He recorded his first career save twelve days later on July 16 in Boston's 9–5 victory over the Detroit Tigers at Fenway Park. His first win in the majors came on July 27 in the Red Sox's ten-inning 6–5 triumph at home over the Angels. He ended his rookie campaign with 27 mound appearances, a 1–2 record, five saves and a 2.28 earned run average . He was left off Boston's World Series roster due to a sore arm.

He registered 64 saves during the next four years, serving as the team's closer from 1969 to 1971.

During spring training prior to the 1972 season on March 22, Lyle was traded to the New York Yankees for Danny Cater and a player to be named later (Mario Guerrero). The transaction eventually proved to be one-sided as Lyle became the Yankees' bullpen ace, establishing himself as one of the best relief pitchers of the 1970s. He played a major role in the Yankees capturing three straight pennants from 1976 to 1978 and winning the World Series in the last two of those years. In 1972, he saved 35 games, an American League record at the time, and a major league record for left-handers; Ron Perranoski had set both marks in 1970, but John Hiller would surpass Lyle's total with 38 in 1973. In 1972, Lyle also became the first southpaw to collect 100 saves in the American League. He also finished 3rd in the 1972 MVP voting.

He again led the league in saves in 1976, and in 1977 became the first AL reliever ever to win the Cy Young Award. He was named an American League All-Star in 1973, 1976 and 1977. In 1976, he broke Hoyt Wilhelm's American League record of 154 career saves, and the following year eclipsed Perranoski's major league mark for left-handers of 179 career saves. Through 1977, Lyle had compiled 201 career saves, and was within range of Wilhelm's career big-league record of 227.

Much as later Yankees closer Mariano Rivera has entered games to the tune of "Enter Sandman," Lyle has also been associated with a trademark song to herald his entry into games, Pomp and Circumstance March No. 1 in D played by Yankee Stadium organist Toby Wright.

But despite the fact Lyle had won the 1977 Cy Young Award, the Yankees signed Goose Gossage as a free agent during the 1977 off-season, and Gossage followed with an outstanding 1978 season which made Lyle expendable. On November 10, 1978, Lyle was part of a major trade that sent him, along with four other players and cash, to the Texas Rangers in exchange for Juan Beníquez and four other players, including a young Dave Righetti. During the 1978 season, Yankees teammate Graig Nettles famously quipped that Lyle went "from Cy Young to sayonara."

In his late 30s, Lyle was unable to duplicate the great success he had previously enjoyed (perhaps due to the strain of pitching over 100 innings six times from 1969—78), and saved only 21 games for the Rangers in 1979-80. Rollie Fingers moved ahead of Lyle in career saves in early 1980, breaking Wilhelm's record just weeks before Lyle reached the mark, and Fingers eventually pushed the record beyond reach.

On September 13, 1980, Lyle was traded to the Philadelphia Phillies for a player to be named later (Kevin Saucier). Although the Phillies won their first World Series title in 1980, Lyle did not appear in the postseason, having been acquired by the Phillies too late to qualify for that. He was first assigned number 39 with the Phillies, but for the 1981 season, he resumed the uniform number 28 which had been his trademark since 1967.

On August 21, 1982, he was purchased by the Chicago White Sox from the Phillies. His last game was played on September 27 of that season for the White Sox, who released him on October 12. Lyle finished his 16-year career with 238 saves, a 2.88 ERA, and a record of 99-76 in 899 games pitched ... all in relief. In 1985, Fingers broke his American League record for career saves; and in 1991 Righetti surpassed Lyle's major-league record for career saves by a left-hander, though Lyle still holds the AL mark of 232.

In 1998, he became the manager of the Somerset Patriots, a minor league team based in Bridgewater, New Jersey. He managed the team to Atlantic League pennant in 2001, 2003, 2005, 2008 and 2009, and has been the only manager the team has had since its inception. [1]

A noted clubhouse prankster in his playing days, Lyle was known for sneaking into the locker room during games to sit au naturel on birthday cakes prepared for teammates, leaving the imprint of his posterior on the frosting. In his autobiography, Lyle noted that teammate Ron Swoboda turned the tables on him by defecating on a cake which was then delivered to Lyle; Lyle said the reason why he eventually stopped his cake sitting was because of the notoriety he gained from doing it, thinking that someone might try to "put a needle in the cake" to hurt him.