Mary Agnes Lane Fahy, 85, who had been active in Catholic and other organizations here for many years, died Monday at the Carroll Manor Nursing Home in Hyattsville, where she lived for about a year. She had Alzheimer's disease, a disorder of the nervous system.

Mrs. Fahy was the widow of Judge Charles Fahy of the U.S. Court of Appeals here. Judge Fahy died in 1979.

Mrs. Fahy, who was born in Washington, graduated from Notre Dame Academy and received bachelor's and master's degrees from Trinity College. She taught English and Latin at Rockville High School before her marriage in 1929 to Judge Fahy, then a lawyer in private practice in Santa Fe, N.M. In 1933, they moved to Washington when the future judge went to work for the government.

Mrs. Fahy was a former president of the Ladies Sodality of the Shrine of the Most Blessed Sacrament and of the Trinity College Auxiliary Board. She had been active in the Women's National Democratic Club, the Christ Child Society and the Notre Dame Guild.

Survivors include four children, the Rev. Thomas Fahy, O.S.H., of Washington, Anne Sheehan of Bethesda, Sister Sarah Fahy, S.N.D., of Baltimore, and Agnes Johnson of Helena, Mont.: a brother, Thomas J. Lane Jr. of Washington, and five grandchildren.