[9] Dylan's recording was released as a single in July 1969 and quickly became his fourth and last top 10 U.S. hit, peaking at #7 on the Billboard Hot 100 for the consecutive weeks of September 6 and 13.

[13] Like many of the tracks on Nashville Skyline, the song is sung by Dylan in a warm, relatively low sounding voice, rather than the more abrasive nasal singing style with which he had become famous.

Kris Kristofferson, who was working as a janitor in the studio at the time, was enlisted to hold the bongos in one hand and the cowbell in the other.

[17] The song was also a favourite of popular singer Madonna, "I used to listen to that one record, 'Lay Lady Lay', in my brother's bedroom in the basement of our house," she recalled.

"[18] Written in the key of A major, or A Mixolydian,[21] the song's chord progression features a descending chromatic line and Dylan's voice occupies a range from F#2 to D4.

[23] Lyrically the song speaks of romantic and sexual anticipation as the singer beseeches his lover to spend the night with him.

The song has become a standard and has been covered by numerous bands and artists over the years, including the Byrds, Ramblin' Jack Elliott, the Everly Brothers, Buddy Guy and Anthony Hamilton, Melanie, the Isley Brothers, Bob Andy, Duran Duran, The Flaming Lips, Magnet, Hoyt Axton, Angélique Kidjo, Ministry, Malaria!, Lorrie Morgan, Minimal Compact,[4][39] Deana Carter, and Pete Yorn.

[44] Despite the band's displeasure with the finished single, many critics felt that the presence of the female choir added a dramatic touch which heightened the song's emotional appeal.

[44] Journalist Derek Johnson, writing in the NME, commented "The harmonic support behind the solo vocal is really outstanding, largely because the Byrds have been augmented by a girl chorus.

This, plus the familiar acoustic guitars, the attractive melody and the obstructive beat, makes it one of the group's best discs in ages.

[46][47] This alternate version, without the female choir, was included as a bonus track on the remastered Dr. Byrds & Mr. Hyde CD in 1997.

[50] Nick Rhodes has stated on the band's official website (answering an Ask Katy question in 2008 about the second single taken from Thank You) "I seem to remember my concern at that time was, in fact, our record label's—Capitol in America and EMI for the rest of the world—deciding to split their decision on their choice for the first single, "White Lines" in the US and "Perfect Day" for the rest of the world.

"[51] American industrial metal band Ministry covered "Lay Lady Lay" during the eighth Bridge School Benefit charity concert in October 1994, with Pearl Jam lead singer Eddie Vedder performing backing vocals.

[56] During the recording, Bill Rieflin was asked to perform drums, but he rejected and quit the band shortly after,[57] with Rey Washam replacing him and thus making his debut with Ministry.

In the Rolling Stone magazine's review of Filth Pig, critic Jon Wiederhorn wrote that the cover "amalgamates a deep distorted bass line, clicking electronic percussion, jangling acoustic guitars, ominous curls of feedback and [Al] Jourgensen's trademark howls.