In the 1860s, families came from the eastern United States and settled the foothills with their ranches and farms. The town of Lyons was founded in 1880 by Edward S. Lyon. He purchased from H.F. and Isabelle Sawyer, noticing the potential to quarry out the red sandstone outcroppings which offered easy quarrying access in the region. Lyon platted the town in 1881; it was incorporated in 1891. No record survives to account for the added "s" at the end of the town's name.