His regiment was soon reorganized as the 8th Kentucky, now re-enlisted for three years, with Lyon appointed as its colonel. He fought in the forces of Earl Van Dorn and then John C. Pemberton during the Vicksburg Campaign. He and 250 of his men managed to avoid surrendering to Grant, and Lyon led them to Jackson, Mississippi, where they joined the Confederate forces there. Later, Braxton Bragg appointed Lyon as commander of two regiments of cavalry under Joseph Wheeler, and he served under James Longstreet during the Siege of Knoxville. Following the Third Battle of Chattanooga, Lyon was placed in charge of Bragg's artillery, saving them from capture during his subsequent retreat.