In August 1651, while minister of Chard, he refused to sign the engagement and was consequently ordered to leave the town not to come within ten miles of it and not to preach in any market town in Somerset. He preached a farewell sermon to his parishioners on 24 August 1651. In November, however, the council at Whitehall reversed the order of banishment and silence. In 1654 he was appointed one of the assistants to the commissioners in Somerset for the ejection of scandalous ministers. Towards the end of 1658, he was elected by the congregation to the charge of All Hallows, Lombard Street, London. He was made one of the approvers of ministers, ‘according to the presbyterian way,’ in London on 14 March 1659. After the Stuart Restoration, in November 1660, he, with other ministers in London, made an ‘acknowledgment’ to the king ‘for his Gracious Concessions... concerning Ecclesiastical affairs,’ but he was ejected from All Hallows in August 1662 by the Act of Uniformity. He seems to have collected a congregation at Dyers' Hall, Thames Street, soon afterwards, and to have preached in the independent meeting-house at Clapham.
Lye was very popular as an instructor of children, and was singularly successful in catechising them. Edmund Calamy the Younger writes that he was taken by his mother to Dyers' Hall to be catechised by ‘good old Mr. Thomas Lye... she having been herself catechised by him in her younger years.’[3] He probably kept a school at his house in Clapham. He died at Bethnal Green on 7 June 1684, and was buried at Clapham on 11 June. His wife Sarah had predeceased him in September 1678. In his will he left property to his two daughters, Sarah and Mary, all that survived of a large family. On the title-page to the ‘Farewell Sermons of the Ejected Ministers,’ London, 1662, is a small portrait of Lye, with thirteen others. Wood pronounces it ‘very like him.’ Lye's books were sold by auction in London in November 1684.[4]