His Dictionarium Saxonico et Gothico-Latinum, published posthumously in 1772, was a milestone in the development of Old English lexicography, surpassed only by, and substantially contributing to Joseph Bosworth's Dictionary of the Anglo-Saxon language of 1838.

He resigned Houghton Parva about 1750, on being presented by James Compton, 5th Earl of Northampton to the rectory of Yardley Hastings, Northamptonshire.

Lye died, aged 73, on 19 August 1767 of gout, from which he had long suffered, at Yardley Hastings, where he was buried with a prominent wall monument.

About thirty sheets were printed just before Lye's death, and the work was posthumously published in 1772 with additions by his friend Owen Manning as Dictionarium Saxonico et Gothico-Latinum (London).

The title pages goes on to say "Accedunt fragmenta Versionis Ulphilanæ, necnon Opuscula quædam Anglo-Saxonica.