To understand the effect of fibrillation in dyeing, non-fibrillated lyocell fabrics and fibrillated lyocell fabrics were dyed with different types of reactive dyes. Their exhaustion, fixation and K/S values were measured and compared. It was observed that fibrillated lyocell shows lower visual colour yield than non-fibrillated lyocell, independent of the exhaustion and fixation. It was also observed that some bifunctional reactive dyes, because of the location of reactive groups and flexibility of their structure, reduced fibrillation of lyocell through crosslinking. It was shown that defibrillating fibrillated lyocell with a cellulase enzyme increased the visual colour yield. Non-fibrillated lyocell fabrics after dyeing were subjected to a hydroentanglement treatment to create a fibrillation effect. These properties suggest that the lower visual colour yield of fibrillated lyocell is not mainly attributed to any change in fibre properties of the fibrils, but as a result of the light scattering from the fibrillated fabric surface.