Lynch was at the heart of plans for the Rising and was aide-de-camp to James Connolly in the GPO. Initially sentenced to death, his sentence was commuted to ten years penal servitude because he was an American citizen. However, he was released on 16 June 1917. Immediately following his release, Lynch became active again, and along with Michael Collins and Thomas Ashe, participated in the reorganisation of the IRB. After the 1917 Sinn Fein Ard Fheis, Lynch, like Collins, held three senior posts: in the IRB, Sinn Fein and in the Irish Volunteers. He was again arrested and deported to America in 1918.
Lynch was elected, although still in the US, as a TD for the constituency of Cork South-East in the 1918 elections. In America he was working frenetically as the national secretary of the FOIF (Friends of Irish Freedom) organisation, but later sharp differences arose between De Valera and the FOIF about how funds raised in America should be spent. Lynch did not take part in the Civil War, but made several unsuccessful attempts to stop it.