According to the United States Census Bureau, Lytle has a total area of 4.1 square miles (10.5 km2), of which 4.0 square miles (10.4 km2) is land and 0.039 square miles (0.1 km2), or 1.08%, is water.
As of the census of 2000, there were 2,383 people, 811 households, and 633 families residing in the city. The population density was 593.4 people per square mile (228.9/km²). There were 898 housing units at an average density of 223.6/sq mi (86.2/km²). The racial makeup of the city was 73.81% White, 0.46% African American, 0.92% Native American, 0.29% Asian, 0.04% Pacific Islander, 21.57% from other races, and 2.90% from two or more races. Hispanic or Latino of any race were 61.18% of the population. There were 811 households out of which 39.6% had children under the age of 18 living with them, 60.8% were married couples living together, 13.6% had a female householder with no husband present, and 21.9% were non-families. 19.9% of all households were made up of individuals and 9.4% had someone living alone who was 65 years of age or older. The average household size was 2.94 and the average family size was 3.38.
In the city the population was spread out with 30.5% under the age of 18, 9.3% from 18 to 24, 26.6% from 25 to 44, 21.4% from 45 to 64, and 12.2% who were 65 years of age or older. The median age was 34 years. For every 100 females there were 91.6 males. For every 100 females age 18 and over, there were 85.1 males.
The median income for a household in the city was $34,857, and the median income for a family was $40,699. Males had a median income of $27,734 versus $21,129 for females. The per capita income for the city was $14,826. About 15.0% of families and 16.6% of the population were below the poverty line, including 21.8% of those under age 18 and 20.0% of those age 65 or over.