He comfortably made it to the last 16 of the 2012 World Championship by beating Darin Young and Scott Rand, 3–1 and 4–1 respectively. However, he struggled against world number four Gary Anderson in the next round, losing 1–4 as his opponent averaged 100. In April, Lloyd dropped out of the world's top 16 for the first time in over a decade and will need to qualify for the upcoming major events if he does not regain his place. In his next major event, the UK Open, Lloyd posted an encouraging result by defeating reigning champion James Wade 9–5, but then lost to world number 48 Joe Cullen 8–9 in the last 32. Lloyd hit a nine-dart finish in the first round of the European Tour Event 2 during a 6–5 win over Alex Roy. In July, he won the tenth Players Championship of the year, his first ranking title in almost 2 years. He beat Andy Hamilton 6–5 in the final and briefly returned to the top 16. He was ranked 17th at the cut-off point before the World Matchplay, but still qualified due to his position on the ProTour Order of Merit. Lloyd faced Mark Webster in the first round and was defeated 6–10. After all 33 ProTour events of 2012 had been played, Lloyd was 16th on the Order of Merit, which qualified him for the Players Championship Finals where he was beaten by Peter Wright 5–6 in the first round, after being 5–3 ahead.