The partisan Victorian crowd basked in the glow of an Australia fight-back led by Lyon, who took five wickets to become only the sixth Australian offspinner to claim 100 test victims.
He joins the likes of Hugh Trumble who took 141 wickets from 32 tests over 100 years ago and most recently Ashley Mallett, who finished with 132 from 38.
"It hasn't really sunk in yet," Lyon, 26, said of the milestone after helping Australia skittle England's second innings for 179.
"It's fantastic and amazing to be honest. It seemed like a long way away when I first started but lucky enough to get there and no one can take them off me," Lyon said.
Australia need 201 for victory with all 10 wickets in hand on day four after openers David Warner and Chris Rogers added 30 without loss by stumps.
Lyon's 5-50 haul was the perfect response after he was dropped before the last Ashes series in Australia, deemed not good enough to be chosen ahead of Xavier Doherty.
His redemption now appears complete.
Lyon began the day batting in tandem with Brad Haddin adding 40 priceless runs to Australia's first innings total, whittling away England's first innings lead down to a meagre 51.
Lyon's average of 23 when batting at number 11 is the highest in tests for those who have played at least 20 innings.
His day ended on an even higher note as he took the key wicket of Kevin Pietersen for 49, when the batsman slogged to Ryan Harris at long off.
It was his fourth five-wicket haul in tests, but the first against England in a series where the plaudits have justly been shared by the pacemen on both sides.
Wily Lyon kept the pressure on England when the quicks took a breather and now has 16 wickets in the series at an average of 26.93 with an economy rate of just 2.82 per over.
"I am pretty proud of the achievement today but I do not get the results I got today with the help of the fellow teammates," said Lyon, who during the 2010-11 Ashes series Down Under, was a curator at Adelaide Oval.
In the four tests, 10 of his 16 wickets have been England's top six batsmen and he was a vital cog in the two collapses England suffered on Saturday, when the beleaguered tourists twice lost three wickets for the gain of just one run.
England's Ian Bell, Ben Stokes, Tim Bresnan and Stuart Broad were all culpable of poor shots, but Lyon's bowling was spot on.
England now face a desperate fight to win a test that they had controlled comfortably at the end of day two.
Given their shattered confidence and Australia's ascendancy, it would seem hard to back against the hosts taking a 4-0 lead in the series.
"Come tomorrow Australia has to be really patient with our batting and it's going to be a massive challenge. We have to hang in there, stay patient and have good intent," Lyon said.