Functionalizing lignin through methylation presents an effective strategy for improving its chemical reactivity, enhancing solubility, and broadening its applicability across various industries. Lignin, a complex and cross-linked biopolymer abundant in plant cell walls, remains underused primarily due to its resistant structure and poor solubility in standard solvents. Methylation, which involves adding methyl groups (-CH3) to the lignin structure, can alter its physicochemical characteristics, making it more suitable for diverse chemical processes and boosting its utility in fields such as biofuels, bioplastics, and pharmaceuticals. This modification can impact lignin’s aromaticity, molecular weight, and reactivity, enabling the creation of lignin derivatives with tailored properties for specific applications. Methylation of lignin can be performed using various reagents, including methyl iodide, dimethyl sulfate, and other methylating agents, often under acidic or basic conditions. This review highlights recent developments in lignin methylation methods, examines how these modifications affect lignin’s structure and properties, and explores potential applications in materials science, renewable energy, and sustainability. The challenges of reaction selectivity, yield optimization, and scalability are also addressed, underscoring the need for continued research to fully realize the industrial potential of methylated lignin.