Used in making soap and found in oven cleaners and drain cleaners, lye is a common term for caustic alkalis such as sodium hydroxide and potassium hydroxide. These are powerful chemicals that will burn skin and eyes quickly. The fumes are hazardous and poisonous, so use any product containing lye carefully. Skin and eye protections are a must. Read and follow all manufacturer label instructions, and keep lye well out of the reach of young children.
Don’t even think about mixing lye or lye-containing products with any other cleaning chemical. Mixing caustic alkalies with anything else (except, possibly, water) can cause violent chemical reactions or release hazardous or toxic vapors.
Reference:
Don Aslett in The Cleaning Encyclopedia: Your A to Z Illustrated Guide to Cleaning Like the Pros.