LuaMode brings a bunch of features like syntax highlighting, auto indentation etc to emacs. There’s an interactive and very handy Lua shell too. Place lua-mode.el in your emacs’s load-path and add the following code to your .emacs file.

;; bring in lua
(setq auto-mode-alist (cons '("\\.lua$" . lua-mode) auto-mode-alist))
(autoload 'lua-mode "lua-mode" "Lua editing mode." t)
(add-hook 'lua-mode-hook 'turn-on-font-lock)

Your favourite editor is now ready for Lua!
If you find the prompt to save abbrevs irritating, add the following into your .emacs

(setq save-abbrevs nil)