The numerical dispersion relations of finite-difference time-domain (FDTD) methods have been analyzed extensively in lossless media. This paper investigates numerical dispersion and loss for Yee's FDTD in lossy media. It is shown that: the numerical velocity can be smaller or larger than the physical velocity; there is no "magic time step size" in lossy media; and the numerical loss is smallest at the Courant limit. It is shown that the numerical loss is always larger than its physical value, and so Yee's FDTD overestimates the absorption of electromagnetic energy in lossy media. The numerical velocity anisotropy can be positive or negative, but the numerical loss anisotropy is always positive. The anisotropies in the three-dimensional (3-D) case are usually larger than those in the 2-D case. Numerical experiments in 1-D are shown to agree with the theoretical prediction.Index Terms-Computational electromagnetics, finite-difference time-domain method (FDTD), numerical anisotropy, numerical dispersion, numerical loss.