The club was established in 1930 as Lye & Wollescote Amateur Football Club and joined the
Worcestershire Combination. They were renamed Lye Town the following year. The club were runners-up in the Worcestershire Combination in 1932–33 and won the Birmingham Junior Cup the following season. They were placed in the South Division when the league was reorganised in 1954, with a tenth-place finish seeing them placed in Division One for the 1955–56 season. They subsequently finished bottom of the Division and were relegated to Division Two. The league reverted to a single division in 1960 and was renamed the
West Midlands (Regional) League in 1962. They were Premier Division runners-up in
2012–13 and won the Floodlit Cup for a second time with a 2–1 win over
Southam United in the final. The club went on to win both the Worcestershire Senior Urn and the Premier Division the
following season, earning promotion to the Premier Division of the newly formed
Midland League. In the 2021–22 season Lye won the
JW Hunt Cup. ==Ground==