I read a post by Alexander Brütt about programmatically creating a Lookup column, and I thought I’d post my code from a slightly longer article a while back. It’s quite an interesting thing to do!

SPList targetList = site.Lists["My Lookup Target"];
SPField targetField = targetList.Fields["My Target Lookup Column"];
newList.Fields.AddLookup("NewLookup", targetList.ID, false);
SPFieldLookup lkp = (SPFieldLookup)newList.Fields["NewLookup"];
lkp.LookupField = targetField.InternalName;
lkp.Update();