Vernon F. (Bud) Lyon, 62, a retired official of the Agency for International Development, died of cancer Tuesday at his home in Alexandria.

As his retirement last year, he was special assistant to AID's director for public affairs.

In that position, Mr. Lyon served as a liaison between AID and private and civic organizations. In 1975, he was a member of the State Department's international disaster relief center, which coordinated offers of assistance from Americans to the refugees pouring out of South Vietnam.

Born in Vermillion, S.D., Mr. Lyon attended the University of Chicago and the law School of the University of South Dakota.

He joined the Brookings Institution here in 1936 and remained there until World War II. From 1942 to 1945, he was a Navy lieutenant commander on the staff of Fleet Adm. Chester W. Nimitz.

As a public information officer, Mr. Lyon participated in the Pacific campaigns, including the amphibious assaults on the Marianna and Solomon Islands, and was awarded the Bronze Star.

He then joined the New York office of the Braun Co., a Los Angeles public relations firm, and in 1956 served as a speech writer during Vice President Nixon's campaign for re-election.

Mr. Lyon was appointed a confidential assistant to the assistant secretary of Commerce for international affairs later in 1956.

In December, 1957, he joined the International Cooperation Administration, a forerunner of AID, which was established in 1961.

Mr. Lyon was a member of the Mount Vernon Presbyterian Church.

He is survived by his wife, Betty W. of the home: two sons, Vernon Frederie Jr., of Frederickbsurg and Lawrence A., of Charleston, S.C., his mother, Mrs. Clarence E. Lyon, of Georgetown, Tex.; a brother, Richard C., of Amberst, Mass., and a sister, Elizabeth Medford, of San Marcos Tex.

The family suggest that expressions of sympathy may be in the form of contributions to the American Cancer Society or Mount Vernon Presbyterian Church.