The 29-year-old off-spinner returned with an impressive haul of 4 for 67 that kept India’s score in check after Australia were bowled out for 300 runs in their first innings.
Fast bowlers Josh Hazlewood (1-40) and Pat Cummins (1-59) also bowled their hearts out during frugal spells to restrict the top-ranked hosts to 248-6 at stumps. India still trail by 52 runs with four wickets in hand.
At stumps, Wriddhiman Saha was batting on 10 with Ravindra Jadeja on 16.
At the start of the day, Lokesh Rahul, who scored 60 and Cheteshwar Pujara who notched up yet another half century shared 87 runs for the second wicket. However, Lyon broke the partnership after claiming Pujara’s wicket.
Lyon then claimed another important wicket of stand-in skipper Ajinkya Rahane who ended up gifting a catch to Steve Smith for 46.
Lyon’s performance was particularly impressive as he had given away 163 runs while taking just one wicket in the previous drawn Test at Ranchi.
At one point, India were cruising at 157 for two but they lost four wickets in the final session for 95 runs.
The hosts would have been in further trouble but for Matthew Renshaw who dropped two catches.
Australia, who triumphed at home in 2014-15, need just a draw to retain the trophy.