If your lawn looks like it's on death's doorstep and the only thing left is to call the reaper, don't despair yet. Reviving a dead lawn is easier than you think. Some lawns are in more distress than others and will require aggressive means (i.e. every tool at your disposal); with others you can get by with better general lawn care including more frequent mowing and adjusting watering habits.
If your lawn is dead most likely the soil is packed too hard and tight for anything to grow well. Remedy this with a lawn aerator. Rent if you can, they can be pretty expensive and you really don't want to have to repeat this process. The day before aerating run your sprinklers over the entire yard. Moist (but not muddy) soil will be easier to loosen. Follow the manufacturer's instructions for the aerator machine. This process will produce a lot of holes in your yard. Add some peat moss to fill the holes in and level it out the area.
For a lawn in really bad condition you may have to also dethatch. This is accomplished with a dethatching machine that will loosen dead grass and get it out of your soil. Go over your lawn from several different directions so you can be sure you cover all the land and loosen all the dead grass as well as weeds and other things you don't want in your lawn. This is a good time to start your yard from scratch. You can also use a hand rake but it will take much longer this way and won't be nearly as thorough.
At this point you have pretty much a fresh grass-free yard to work with. Purchase grass seed from your local lawn and garden center but be careful about what you select. In order for your grass to have gotten into such awful shape to begin with, you either used a type of grass that wasn't ideal for your soil or you didn't properly care for it. If you don't have the time to care for a finicky lawn choose a grass breed that is native to the area, not something you have to fight against nature to grow successfully. Have your soil's pH level tested as well and add any necessary nutrients to ensure a healthy lawn. Make sure the grass seeds you purchase are suited for your soil conditions.
Provide Proper Care
Once your lawn has resprouted, or if your lawn was not entirely dead, it is important to learn good maintenance practices to keep it healthy. According to the University of Colorado Extension Service, lawns should be watered, not according to a schedule, but based on the type of grass grown, the soil and weather conditions. It should also be watered deeply enough so the soil is moist down to the roots. Grass should be kept mown to a height of 2 to 3 inches with no more than a third of its height cut at each mowing.