What is lye soap? Yes, I am serious here since all soap has lye in it. We have a store that sells some. I am wondering if it is over lyed and that is why it is called that. I remember years ago some saying that grandmom made lye soap and it would take the hide off a cow. Guess that would be good for using as a pot cleaner but not bathing with at all. I know I would not use it to wash my clothes.