Lyrup is accessible by ferry. It was established in 1894 by the South Australian government as a part of the creation of a communal land system (one of twelve settlements). 243 people originally settled in Lyrup. The town was gazetted on 24 September 1896 and was named after "Lyrup's Hut", a boundary rider's shack.
Lyrup still maintains a communal land system. It has a community club, general store and picnic areas. The area around it produces grapes, stone fruit, citrus, almonds, apricots and some corn.