Shortly after the Civil War, Joshua Lyles returned to Tennessee to encourage newly-emancipated slaves to settle in Indiana. As the settlement grew, Lyles donated sixty acres of land to the Airline Railroad; in exchange, the railroad built a train station, providing passenger and mail service to the settlement. The introduction of rail service speeded up growth, so that by 1913 in addition to 55 homes the settlement, with a population of over 800, was home to a school, two churches, and two general stores.
In 1913 unusually heavy rains caused the White, Wabash, and Patoka rivers to overflow their banks. Lyles Station's proximity to all three meant that it was exceptionally susceptible to this disaster. The floodwaters not only destroyed homes, but also drowned cattle—essential for Lyles Station's agrarian population—and rendered the railroad useless; Wayman Chapel African Methodist Episcopal Church was spared, however.
The community never fully recovered from this disaster, as most of the residents sought a less risky existence in the larger cities to the north and south, such as Evansville and Terre Haute. However, a school was built in 1919, and educated the remaining children of the community until it was closed in 1958 as part of a trend towards school consolidation.
As of mid-2007, only about six families remain in Lyles Station, nearly all descended from the original settlers. Wayman Chapel A.M.E. Church still holds regular Sunday services. The schoolhouse, Lyles Consolidated School, has been fully restored from its decrepit state and now serves as a living history museum.
Lyles Consolidated School, the third school to be located in Lyles Station, was opened in 1919, and used until 1958. For nearly forty years it remained abandoned, and by 1997 it had deteriorated almost to the point of total collapse. In June of that year, the Lyles Station Historic Preservation Corporation was founded to help preserve and promote the history of the Lyles Station community. Its major project was restoration of the schoolhouse, intending to use it as a living history museum to educate local schoolchildren both about Lyles Station history itself as well as the daily routine of a school in the early twentieth century.
To that end, the Corporation lobbied to have the school, and the entire community, placed on the National Register of Historic Places. Achieving this goal in 1999, the Corporation then began seeking funds to restore the school. Restoration of the site was completed in 2003.