Probably the Three Cups most famous guest was J.R.R. Tolkein.
Tolkien and his younger brother Hilary used to stay here every summer with their guardian Father Francis Morgan, a Catholic Priest, between 1905 & 1910. During this period there is even a pencil sketch by Tolkien entitled ‘Lyme Regis Harbour from the Drawing Room of the Cups Hotel’ which he produced as a 14 year old in 1906. Tolkien then regularly returned to Lyme in the 1920’s & 1930’s with his young family and his now aging guardian. This was during Tolkien’s most formative years relating to his most popular books THE HOBBIT and LORD OF THE RINGS Trilogy which contain many allusions and images relation to Lyme and its surroundings.

Alfred, Lord Tennyson stayed in the Three Cups in September 1867. He visted Lyme, because of it's Jane Austen connections. He was reputed to have walked to Lyme from Bridport and asked of his friend Palgrave to be "taken to the Cobb and shown the steps from which Louisa Musgrove fell".  (from the memoirs of his son Hallam)

G. K. Chesterton stayed at The Three Cups Hotel in Lyme Regis in 1930, and wrote a letter and a poem from there on the hotel’s stationery .

Jane Austen loved Lyme Regis and even used the town in her book Persuasion.
She stayed in Hiscott's Boarding House, when it occupied the site, previous to the Three Cups being built!