  Spectral lag, which is defined as the difference in time of arrival of high
and low energy photons, is a common feature in Gamma-ray Bursts (GRBs).
Previous investigations have shown a correlation between this lag and the
isotropic peak luminosity for long duration bursts. However, most of the
previous investigations used lags extracted in the observer-frame only. In this
work (based on a sample of 43 Swift long GRBs with known redshifts), we present
an analysis of the lag-luminosity relation in the GRB source-frame. Our
analysis indicates a higher degree of correlation -0.82 +/- 0.05 (chance
probability of ~ 5.5 x 10^-5) between the spectral lag and the isotropic peak
luminosity, Liso, with a best-fit power-law index of -1.2 +/- 0.2, such that
Liso proportional to lag^-1.2. In addition, there is an anti-correlation
between the source-frame spectral lag and the source-frame peak energy of the
burst spectrum, E_pk(1+z).
