Lignin, a major component of plant biomass, is emerging as a promising sustainable material for active packaging. Nonwoody lignin sourced from agricultural residues and herbaceous plants offers distinct structural and functional advantages over woody lignin, thereby increasing its suitability for packaging applications. This chapter examines the extraction, characterization, and modification of nonwoody lignin, highlighting its antioxidant, antimicrobial, and UV-protective properties that can improve food packaging performance. The integration of nonwoody lignin into biodegradable films, coatings, and composites is reviewed, along with recent advances in nanotechnology and chemical modification to increase its functionality. Key challenges, including processing limitations, compatibility with biopolymers, and regulatory considerations, are discussed alongside potential solutions. Overall, this chapter provides a comprehensive overview of nonwoody lignin as an innovative, eco-friendly material, paving the way for sustainable packaging developments.