Watched by West Ham manager, Ted Fenton, and chief scout Wally St Pier, Lyall was offered a place at West Ham aged fifteen. In October 1955 he joined West Ham United as a groundstaff boy, with duties such as boot cleaning, painting the football stands and wages clerk. He played youth team football as a left back. In February 1957 he won his only significant international honour when he played for England Youth in a 7–1 victory over Luxembourg at Upton Park. In 1957 he was also a member of the West Ham side which lost 8–2, on aggregate, to Manchester United in the FA Youth Cup Final.
He made his senior debut in April 1959. His first team career was interrupted and prematurely ended by a serious injury to his left knee. In January 1964 after making 36 appearances in all competitions, aged 23, he was diagnosed with an inoperable, generally disarranged knee and retired from playing professional footbal Lyall was granted a testimonial game by West Ham which was played in April 1964 and netted him £3797. He was offered the role of part-time youth team manager.Impressing at part-time youth manager Lyall was offered the role on a full-time basis in 1967. He rose through the coaching ranks at Upton Park to succeed Ron Greenwood as team manager in September 1974, managing West Ham for 15 years (1974–1989). In 1975, at the end of his first season as manager, West Ham won the FA Cup final and reached the final of the European Cup Winners Cup the following year, losing 4–2 to Anderlecht. However, West Ham slipped down to the Second Division in 1978. Lyall attempted to rebuild the side and made significant purchases in Phil Parkes, £565,000 from Queens Park Rangers, a world record for a goalkeeper and Ray Stewart from Dundee United for £430,000, a British record for a teenager. West Ham returned to the First Division in 1981 winning the title by a thirteen-point margin.
During their exile from the top flight, on 10 May 1980, West Ham beat Arsenal in the FA Cup final, the last lower league side to do so. In their 1981 promotion season, Lyall also led the Hammers to the final of the League Cup – where they drew 1–1 against Liverpool, before losing the replay 2–1, having led early in the match. They also reached the quarter finals of the European Cup Winners Cup in the same year.
West Ham spent the first four years back in the top flight consolidating their position. Long serving Trevor Brooking and Frank Lampard both retired and Billy Bonds was struggling with the effects of first team football. Lyall again attempted to rebuild the team bringing Frank McAvennie from St Mirren and Mark Ward from Oldham Athletic. 28 goals from McAvennie, 25 from Tony Cottee and an eighteen-game unbeaten run saw Lyall take West Ham to their highest ever league finish in the 1985–1986 First Division campaign when they finished third behind champions Liverpool and runners-up Everton. Unfortunately they were unable to compete in the UEFA Cup because of the ban on English teams from European competition arising from the previous year's Heysel Disaster. Lyall failed to build on the side which finished third in the First Division. McAvennie was sold to Celtic in 1987 and Cottee to Everton in July 1988 for a British transfer record of £2.05 million. Their replacements combined with the additions of Tommy McQueen, Gary Strodder, David Kelly, Allen McKnight, Liam Brady, Julian Dicks and the return of McAvennie in March 1989 failed to save West Ham from relegation in May 1989. Lyall was sacked in June 1989. He was awarded an ex gratia payment of £100,000 but left the club in what Lyall described as 'upsetting' circumstances, meriting only 73 words in a terse acknowledgement of his service in the club programme, Lyall left West Ham after 34 years service.
- 1987 Panini sticker
He made his return to football management on 11 May 1990 with Ipswich Town. During the 1989–90 season, he acted as technical advisor to Terry Venables.
At the end of 1991–1992, Lyall guided Ipswich Town to the Second Division championship and promotion to the newly formed Premier League. In January 1993, Ipswich were fourth in the Premiership and fans were hoping for at least a UEFA Cup place, maybe even the Premiership title. But a dip in form during the final weeks of the season saw Ipswich finish 16th and 1993–94 brought a similar pattern, a good start following by a slump – Ipswich finished 19th in the final table and were only saved from relegation by Sheffield United's last gasp 3–2 defeat at Chelsea. Lyall then 'moved upstairs' and took on the role of Director of Football with Mick McGiven taking control of 1st team management at Portman Road.
Lyall resigned as Ipswich Town manager in December 1994, with the club bottom of the Premiership, and never returned to football management.
-John Lyall gates at Upton Park, which have now been relocated to the club shop at the London Stadium
Lyall died suddenly on 18 April 2006, after suffering a heart attack, at his home in Tattingstone, Suffolk, at the age of 66. His wife and family still live in Suffolk.
Sports Heritage Blue Plaque for John Lyall at West Ham's Boleyn Ground Sign showing 'The John Lyall Gates' at the entrance to West Ham's Boleyn Ground
When West Ham played Middlesbrough in the FA Cup Semi-final on 23 April 2006 at Villa Park, a one-minute silence was held in Lyall's honour, although after only a few seconds the West Ham fans started a chant of "Johnny Lyall's Claret and Blue Army" in tribute to their most successful ever manager. West Ham won the match 1–0 to reach their first FA Cup Final since 1980 when Lyall was their manager. On 5 December 2007 it was announced that the Heritage Foundation charity would be erecting a blue plaque in Lyall's memory at West Ham's Upton Park ground on 20 January 2008.
In December 2009, West Ham renamed the main gates to Upton Park, The John Lyall Gates. West Ham announced in May 2015, that as part of their relocation to the Olympic Stadium in 2016, the gates would be relocated to the new site.