Yes, web development is one of Common Lisp’s strengths today.
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As a web server, use Hunchentoot, formerly known as tbnl, by Dr. Edmund Weitz.
You can run it as a back-end to Apache using mod_proxy as a reverse proxy, or as a stand-alone server.
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Various HTML generation solutions are available, from PHP-style templates to Lisp macro hacks to XSLT. Just take your pick.
HTML-TEMPLATE is one example.
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Closure XML is available for XML parsing, serialization, XPath 1.0, XSLT 1.0.
There is also Closure HTML for HTML tag soup parsing.(Full disclosure: I’m the maintainer of Closure XML and Closure HTML.)
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If you like, Parenscript can make your JavaScript experience lispier, but you can also write plain old JavaScript yourself, of course.
Another cool JavaScript enhancing solution in jwacs, which is written in Common Lisp and transforms JavaScript to add continuation support.
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Web service projects might require an HTTP client in addition to a server.
Drakma is the library to use for that today.
PURI is useful for URI manipulation.
And there is more! One starting point is cliki, for example cliki.net/web.
On the web, nobody knows your server is written in Common Lisp 🙂