The importance of producing various functional materials from sustainable sources increases as it relies on biomass with lignocellulosic properties, due to its vital importance. Lignocellulose consists mainly of lignin, as lignin in nature represents the only true aromatic polymer of large size. Lignin was an undesirable by-product, as its physical and chemical nature as a representative biopolymer was neglected for a long time till the discovery of its unique properties and distinguished functionality. Lignin functionalities have many advantages because they offer versatile applications such as in energy, healthcare, environment, and constructions. Some functions are offered by lignin’s chemical structure and functional groups that are present. Other functionalities may also be acquired due to chemical modification, composite formation, or nanostructured advantages. This chapter highlights the origin of lignin functionality and the advantages of lignin functionalization in living plants and in different organic and nonorganic composites. In addition to its novel properties in nanoscale, it also summarizes the merit of employing lignin-based materials in different applications.