In 1960, he was the first quarterback ever drafted by the American Football League's Houston Oilers, where he split time with George Blanda in the Oilers' 1960 and 1961AFL Championship seasons. In 1961, Lee threw for 457 yards against the Boston Patriots, then an AFL record, and set another league record with a 98-yard touchdown to Willard Dewveall against the Chargers. Lee and Blanda combined to throw 38 touchdowns for the Oilers in 1961. Lee played in every game for the Oilers from 1961 to 1963.
In 1964, he was the first and only player to ever be "lend-leased" to another team. He was loaned to the Denver Broncos and returned to the Oilers two years later. While in Denver, Lee threw for 370 yards in one half against the Oakland Raiders.