He attended the common schools of Oxford, the Worcester High School, and Worcester Technical Institute.
He moved to Waterbury, Connecticut in 1881 and engaged in mercantile pursuits and the real estate business. The couple had three sons, Frederick, John, and Theodore. Lilley was elected as a Republican to the Fifty-eighth, Fifty-ninth, and Sixtieth Congresses, holding office from March 4, 1903 to January 5, 1909.
He did not seek renomination in 1908, having become a candidate for Governor.
By resolution of the House of January 20, 1909, the seat was declared to have been vacated on January 6, 1909 for the reason that incumbent had entered upon the duties of the office of Governor of Connecticut the preceding day. During his short tenure, he increased funding for the public school system and appropriations were budgeted for a statewide movement against tuberculosis.
He also endorsed governing monopolies and establishing a public service commission, but both issues were defeated by the legislature. Lilley was Governor of Connecticut from January 5, 1909 until his death on April 21, 1909 in Hartford at age 49 years, 261 days, from causes that are unknown.
He was interred at Riverside Cemetery, Waterbury, Connecticut.
A member of Connecticut Republican State Committee from 1901 to 1909. Lilley also served in the Connecticut House of Representatives from 1901 to 1903. He was a member of the Union League.