On his way from the Academy to the Lyceum, Socrates runs into two men, Hippothales and Ctessipus. They suggest that he join them in the newly erected Palaestra for some conversation. The talk turns to Hippothales's overpowering crush on the boy Lysis, and Ctessipus recounts how Hippothales is constantly singing the boy's praises, to the point of being obnoxious. Socrates asks Hippothales about his method of wooing Lysis, and criticizes him for inflating the boy with too much praise, thus making him harder to catch. Socrates offers to come inside and meet the boy himself, in order to show Hippothales how to woo him.

Inside, Socrates, Lysis, and Lysis's friend Menexenus sit down to talk. Socrates convinces Lysis that he is currently a "slave" to his parents, and that the only way out of this situation is through greater knowledge and understanding. Then a lengthy dialogue about the nature of friendship commences, with Socrates proposing ideas and Lysis and Menexenus alternating in brief expressions of agreement.

A number of causes of friendship and definitions of "the friend" are considered and rejected in the dialogue. First, Socrates considers whether the lover or the beloved is the friend, and rejects both because it is always possible that the beloved hates the lover. The second set of propositions argues that like is the friend of like, and then that unlike is the friend of unlike. The former is rejected because like can desire or need nothing from like, and the latter because it seems a "monstrous" idea that the good would be the friend of the bad.

A third hypothesis suggests that the good is the friend of that which is neither good nor bad, and that this neutral element is motivated to befriend the good because of the presence of surrounding evil. This answer seems good, but is soon rejected: the ultimate cause of friendship can never be found in friendship "for the sake of" something else, and so evil cannot be the motivating cause of friendship.

The final thesis is simply that desire, which is in itself neither good nor evil, causes friendship, and further that desire occurs between two things when they are "congenial." But congeniality doesn't avoid the problem that like has no reason to befriend like, and so this final thesis, too, is rejected. The group of debaters is broken up as the boys' tutors arrive to take them away.