Lane was born in County Cork, Ireland. The Lane family emigrated to Fairview in Guernsey County, Ohio, in 1821, and moved to Kentucky in 1825. In 1836 Lane moved to Texas to participate in its war for independence against Mexico. After Texas had gained its independence, Lane lived in San Augustine County in East Texas and then San Antonio, where he briefly served as a Texas Ranger. In 1846 Lane joined the First Regiment, Texas Mounted Riflemen, as a first lieutenant to fight in the Mexican–American War. Lane fought with honors at the Battle of Monterey and was later given the rank of major and command of his own battalion. After the Mexican–American War, Lane wandered about doing various things in Arizona, California, and Peru before opening a mercantile business in Marshall, Texas, in 1858.