lie, lye

Lie or lie means to tell a falsehood or untruth, or the falsehood or untruth itself--
"It's a sin to tell a lie..."
"I cannot tell a lie..."
Don't lie to me!
You lie like a rug!

Lie or lie also means to recline, or to be in a horizontal position--
Lie down and take it easy.
Are you going to lie in bed all day?
Rover, lie down!

Lie or lie is also an old-fashioned term meaning to be in a particular place, said of a thing--
Does the town lie this way?

Lye or lye ( rhymes with lie )  means caustic soda, a strong and potentially dangerous chemical used to clean drains--
Lye is dangerous; we'll have to lock up what we don't use.
Be careful with that. Lye can burn your skin.

Note--a "liar" is a person who tells lies, or who is lying as we speak--
"How could you believe me when I say I love you when you know I've been a liar all my life?"
"Liar, liar, pants on fire!"
Not to be confused with a "lyre" ( rhymes with fire ) an ancient stringed musical instrument, or a modern facsimile. A "lyre" looks like a small U-shaped harp--
Music stands often have a lyre design.
"...with lyre and timbrel..."