In 1898, by order of Emperor Nicholas II, Lyapunov was appointed military governor and chief of the local troops on Sakhalin Island.

He lived in Saint Petersburg, resolved issues with the appointment and transfer of affairs, looked for employees for his staff, despite the fact that the Governor-General of the Amur Region was constantly urging him to take up his post, because Sakhalin had been without a military commander for almost a year.

As the governor, Lyapunov made frequent visits with audits to Korsakovsky and Rykovsky (Modern-Day Tymovsky) districts.

Unlike his predecessors, he constantly asked for an audience with the Governor-General of the Amur Region, and tried to make reports, if not to Saint Petersburg, then at least to Khabarovsk.

On 19 July 1905, Lyapunov, who was at his headquarters in the village of Onor [ru], gave the order: "The lack of food and firearms, as well as entrenching tools, the lack of sanitary facilities, the enormous numerical superiority of the Japanese army and the absence of a prepared path of retreat put us in such a situation when which further resistance would be useless bloodshed.

In view of this, having received an offer from the commander of the Japanese army, which landed on the island, to surrender, I convened a military council, at which, to discuss the general situation...".