Lydiate was at his chop-tackling best in Wales' comfortable defeat of France two Friday's ago but the flanker knows he and the rest of the side must emulate that performance to be successful against Stuart Lancaster's men.
"It's a massive challenge, especially going down to Twickenham and facing England in their own back yard," he said, looking ahead to Sunday's encounter.
"But that's why you play rugby. You want to play in these big games and everyone who will be involved will be really looking forward to it. I'm sure there are going to be lots of people watching and it's going to be one of the biggest games of the tournament.
"England obviously lost to France in their first game but it was by a narrow margin and they've got stronger with each game. Their form is really up there this year and each year they're growing as a squad, bringing in new players who are stepping up and giving the coaches markers for selection. It will be a real tough battle going up there."
After a 26-3 defeat to Ireland in Dublin on the second weekend, Wales bounced back into title contention with their win over France. Their good recent record against England is another positive looking ahead to Sunday, with Scott Williams' try securing victory for Wales at Twickenham in 2012.
And last March, two Alex Cuthbert scores guided Wales to a famous Championship success over England at the Millennium Stadium.
"We're full of confidence going into this game," said Lydiate, who warmed up for Sunday's battle by playing 15 minutes for Racing Metro in their Top 14 win over Castres.
"We were the same going into the Ireland game but we don't want to feel like we did after that. Against Ireland I gave away a lot of penalties personally and it's not something I want to bring into my game.
"But it was definitely a step in the right direction against France, the boys up front did a great job. The experience we have helps when it comes to the pressure games but we try and take each game as it comes and not think about it too much.
"We need to focus on what we need to do personally and collectively as a squad."