He would eventually undergo Cyber conversion shortly before his death.
Lytton was born on the satellite Riften 5, orbiting the planet Vita 15. He knew of the Time Lords.
When the Fifth Doctor first encountered Lytton, he was commanding a squad of Daleks in a plot to rescue Davros creator of the Daleks from imprisonment in stasis on a human prison space station. When Davros altered some of the Daleks to be loyal to him and attempted to seize control from the Dalek Supreme, Lytton was one of the few survivors of the ensuing battle and was left trapped in London in the year 1984.
Lytton was later contacted by Cryons, who lived on their icy planet of Telos which was controlled by the Cybermen. The Cryons needed help to defeat them and Lytton would help them in exchange for diamonds which the Cryons had in large numbers. He actually planned on contacting the Cybermen living in the London sewers to win their trust, so that he could betray them on behalf of the Cryons.While working with the Cybermen under a false alliance, Lytton would encounter the Sixth Doctor. The Doctor distrusted him immediately, even after the Cybermen took Lytton prisoner as well. The Cybermen transported Lytton, along with the Doctor and his companion, Peri Brown, to Telos, where it was revealed to the Doctor that Lytton was working for the Cryons and not for the Cybermen themselves.
Once the Cyber leader learned of this, he ordered Lytton to be converted into a Cyberman. Lytton had his limbs removed and replaced with metal stronger ones. Cyber like rods attached to his head, Lytton was almost a fully converted Cyberman.
The Doctor tryed to help him but it was too late, the drug which would remove all emotion from Lytton was taking effect and he was going through the last stages of conversion. However before his conversion was complete he attacked the Cyber controller and helped the Doctor save earth.
The Doctor would feel regret and remorse for the death of Lytton.