Lisbon enjoys mild winters and warm summers, with rainfall largely confined to autumn and winter, although even then about half those days are dry. Average daytime temperatures in the winter of about 11°C mean that you can sightsee comfortably all year round. Summer highs can reach around 30°C, when this happens make like the locals and head out of the city to the nearby beaches!
Mid-June to September marks the peak of the holiday season in Lisbon, with prices rising accordingly. If you're willing to brave some rain then the winter months will have the best deals on flights and accommodation, but for a great compromise the shoulder months of May or October are perfect. The weather is still fairly good but the prices are lower and the crowds less, allowing you to make the most of your holidays in Lisbon.