Before his death, Lynott was planning a third solo album, and had spoken to Downey about a possible reformation of Thin Lizzy around March 1986, possibly with Gorham and Sykes, and had booked studio time for January of that year. "Phil asked Brian Downey and I to re-form Thin Lizzy and we both agreed," recalled guitarist Robin George, on whose Dangerous Music Lynott had played. "We made some recordings in the studio in his back garden in the house at Kew during December . It went absolutely great… Unfortunately, the cassette of our material failed to resurface after his death. It was the only copy. It was such a shame as Phil was vibed up about the new Lizzy."
Lynott died in hospital in Salisbury, Wiltshire, on 4 January 1986, aged 36, having suffered from internal abscesses, pneumonia and septicaemia, brought on by his drug dependency, which led to multiple organ failure.
On 17 May, Thin Lizzy reformed for the Self Aid concert, with a line-up of Gary Moore, Downey, Gorham, Wharton and Bob Daisley on bass. Bob Geldof and Moore handled most lead vocals, though various singers got onstage for "Whiskey in the Jar". A compilation album, Soldier of Fortune, was released in 1987, and also that year, the "Vibe for Philo" tribute concert in Lynott's memory was organised by Dublin DJ and promoter Smiley Bolger, which continues on an annual basis on the anniversary of Lynott's death.
The remaining members of Thin Lizzy did not work together until the recording of the single "Dedication" in October 1990, when a rough demo of Lynott's called "Guiding Light" was worked into a finished song to commemorate the fifth anniversary of his death. The song dated from the Grand Slam days and had been originally written with guitarist Laurence Archer.Modern recording techniques were used to replace the guitar and drum tracks with new work by Downey and Gorham. Gary Moore had agreed to participate as well, but ultimately did not do so. The song charted in the UK at no. 35 during early 1991, and no. 2 in Ireland, and featured on another greatest hits compilation album, Dedication: The Very Best of Thin Lizzy, released in February of that year, which reached no. 8 in the UK album chart. However, a follow-up reissue of "The Boys Are Back in Town" only reached no. 63 in the UK, although it peaked at no. 16 in Ireland.