Lyon subsequently commanded the regiment in the Peninsula from 1808 to 1811 at the battles of Vimeiro, Talavera, Busaco, and the first siege of Badajoz. In June 1813 he was sent to Germany to assist in organising the new Hanoverian levies (distinct from the King's German Legion), and was present at the operations in the north of Germany in 1813–14, under the prince royal of Sweden. He commanded a division of Hanoverians at the battle of Göhrde in Hanover, 13 September 1813, and afterwards commanded a mixed force of Russians, Hanoverians, and Hanseatics, under Count von Benningsen, which blockaded Hamburg. Lyon commanded the 6th Hanoverian brigade during the Waterloo Campaign and the advance to Paris. The brigade was with the reserve near Hal on 18 June, and did not engage in the battle.