Lyman came from an old and wealthy Boston family and was educated at Harvard where he obtained his PhD in 1900. After a short spell studying abroad at Göttingen, Germany, and Cambridge, England, he returned to Harvard where he served as Hollis Professor of Physics (1921–25) and director of the Jefferson Physical Laboratory (1910–47).

Lyman was a spectroscopist who first developed a technique of investigating spectra in the ultraviolet region. In 1906 he observed the Lyman series of lines in the ultraviolet spectrum of hydrogen (similar to the series discovered by Johann Balmer in the visible region).