Nathan Lyon moved from Young to Canberra as a teenager where he went on to play for ACT Cricket's under-17s and under-19s representative teams. Lyon played for Western Districts and University of Canberra Cricket Club in ACT Grade cricket and debuted for the ACT Comets in 2008 in the Cricket Australia Cup against the South Australian Second XI where he claimed a wicket on day one. During his time with Comets Lyon was mentored by captain, and later captain-coach, Mark Higgs, who helped him in his spin bowling, getting his bowling action right as well as the tactical side including what lines to bowl and fields to set. After Lyon left the Comets he continued to keep in contact with Higgs in regards to the game. In 2010 Nathan Lyon moved to Adelaide where he played for the Prospect Cricket Club in the South Australian Grade Cricket League while continuing playing for the Comets in the Futures League. After Lyon's performance in the 2010 Futures League Twenty20 in December for the Comets in Melbourne which South Australia's Twenty20 coach Darren Berry witnessed he was selected to play for the Southern Redbacks in the KFC Twenty20 Big Bash.
On 26 July 2011, Lyon was selected in the Australian Test squad for the tour to Sri Lanka. Nathan Lyon took two wickets for Australia against the Sri Lanka Board XI in the three day warm-up match at the Paikiasothy Saravanamuttu Stadium. Lyon made his test debut against Sri Lanka at Galle on 31 August 2011. Nathan Lyon took his first wicket off his first ball in Test Cricket on 1 September 2011, his victim was Kumar Sangakkara. With this feat he became the second Australian (and fourteenth international player) to take his first wicket off his first ball in Test Cricket. He finished with 5/34 in his first innings, becoming the 131st player to take five wickets on debut in a Test match.
In November 2011, Lyon became just the seventh number 11 batsman to have the top score in his team's innings, when he scored 14 in Australia's second-innings total of 47 in the 1st Test against South Africa.
Nathan Lyon played his first test in Australia at the Gabba starting on 1 December 2011 against New Zealand in the first Test match of the series. Lyon took 4/69 in the first innings and 3/19 in his second innings result in match figures of 7/88, resulting in being the best Test match bowling figures by an Australian off-spinner at the venue. He played in three of the four Tests of the subsequent home series against India—being left out of the team for the third Test on the pace-friendly WACA Ground—taking seven wickets at an average of 41.57. Former Australian off-spinner Ashley Mallett criticised Lyon's delivery method during the series, saying he had been bowling from too wide on the crease.
On 24 April 2013, Lyon was named as the only spinner in the upcoming 2013 Ashes series for the Australian squad. It held true until hours before the 1st match when he was dropped out of the lineup in favour of Ashton Agar, giving him a shock debut, then went on to score 98 on his test debut, which was also a world record for a no. 11 batsman. However, Lyon was recalled to the team for the Third Ashes Test, and in the Fourth Ashes Test at Chester-le-Street, he took figures of 4/42 on the first day, and helping to restrict England to 238 in their first innings.
On 28 December 2013, during the Boxing Day test match at the Melbourne Cricket Ground, Lyon took his 100th test wicket and also his first five wicket haul in Australia. Lyon became just the sixth Australian off-spinner to take 100 Test wickets.
On 5 January 2014, Lyon became only the second cricketer ever to not be dismissed in any innings during a five test series. Lyon made 60 runs during his 6 innings with a strike rate of 52.63.