The group was founded in late 1969 in Dublin, Ireland, by Lynott, guitarist Eric Bell, electric organist Eric Wrixon and drummer Brian Downey. Wrixon was gone by early 1970, and tiring of the limited possibilities in Dublin, the group relocated to London in 1971.

Signing a contract with Decca Records, Thin Lizzy's first hit came in 1973, with "Whiskey in the Jar", a version of a traditional Irish song. (Metallica scored a major hit with their 1998 cover version, featured on their album Garage Inc., winning them a Grammy in 1999).

However, the group initially had problems matching the success of "Whiskey...", and after a disastrous gig, where a drunken Bell walked offstage, leaving Lynott and Downey alone onstage, Bell left the group by mutual consent. His immediate replacement was Lynott's former Skid Row band mate and guitarist Gary Moore who stayed long enough to record a number of tracks including the single 'Little Darlin' and 'Still In Love With You' (which he co wrote but wasn't credited, although towards the end of his life, after Lizzy's breakup, Lynott was always the first to confirm that 'Still In Love With You' was "Gary's Song") and securing a new record deal with Phonogram Records. After this Lynott and Downey regrouped, recruiting Scott Gorham and Brian Robertson as guitarists to make what was arguably the classic (and most successful commercially) Thin Lizzy lineup.

Fighting (1975) was their first album success, however the following album, Jailbreak, was a smash hit thanks to the singles "Jailbreak" and "The Boys Are Back in Town", their most successful and remembered songs.

Robertson quit the group in 1978, and was replaced by Gary Moore, then a succession of guitarists (including Midge Ure at one stage), though the group was sometimes reduced to the core trio of Lynott, Gorham and Downey.

During the late 1970s and early 80s, Thin Lizzy played to a rabid fanbase but was unable to break into mainstream markets. Unlike most established rock musicians, Lynott was a vocal supporter of early punk rock; this endeared him to some punk musicians and fans, but many more punks rejected Thin Lizzy as a useless relic.

Their live shows at this time were no-nonsense, no special effects affairs relying purely on the music and Lynott's rapport with the fans. Encores would feature Lynott seemingly ignoring repeated requests from the crowd for "The Rocker". Eventually, he would say "This is what I want to play... a song called The Rocker" and the band would launch into the crowd favourite. Their critically acclaimed live album Live and Dangerous has been called one of the best examples in the genre of concert recordings, having been voted the best live rock album of all time by readers of Classic Rock (magazine), as reported by the BBC.

One notable highlight for the band in their latter days was headlining the first ever Slane Castle concert in 1981 - and like all Irish dates, the final encore was a crowd pleasing "Whiskey In the Jar". The supporting lineup that day included Kirsty McColl, Hazel O'Connor and U2.

After a farewell tour in 1984, Lynott dissolved Thin Lizzy and focused on his solo career. Lynott continued his solo career, which he had begun while still with the group with the album Solo in Soho, yielding hits in "Dear Miss Lonely Hearts", "King's Call" (featuring Mark Knopfler on guitar), and "Yellow Pearl" (used in the early 80s as the theme tune for the BBC programme Top of the Pops). He also recorded a rock'n'roll medley single in 1983, "We Are The Boys (Who Make All The Noise)" with Roy Wood, Chas Hodges and John Coghlan.