Using Natbib(http://wiki.lyx.org/LyX/HumanitiesLyX)

To set up LyX to use natbib, go to Document→Settings→Bibliography and check natbib.

Add the following line to your LaTeX preamble:

This specifies in-text punctuation options for citations, i.e., Author (Year), commas between citations, and so on. See the natbib documentation for details.

To add a bibliography to your LyX document, go to Insert→List/TOC→BibTeX bibliography, and hit "Add" to add a database. Select the .bib file from the list* or browse to find it on your computer.

*Hint: If you save your bib file in a place where LaTeX can find it (usually ending in .../texmf/bibtex/bib/), then it will appear in the list in the "Add" dialog, after you have hit "Rescan" in Tools→TeX Information. The same holds true for style files.

Then select a citation style. Note that it has to be one that has been designed for natbib. Use either one of those shipped with natbib (plainnat, unsrtnat, abbrvnat), get one from the internet, or design your own with the custom-bib utility (which is an interactive command line tool by the author of natbib that asks you some questions about your formatting wishes and creates the appropriate style file for you – see this page for more information).

After you have closed the BibTeX dialog, LyX will have access to your bibliography and you can add citations from inside LyX using Insert→Citation. The dialog allows you to choose from the following options for in-text citation:

Author (Year)
(Author, Year)
Author Year
Author, Year
Author
(Year)
Year

You can cite multiple entries from the Add Citation dialog by hitting "Add" several times for various entries and then click "OK."