Biorenewable polymers have emerged as an attractive alternative to conventional metallic and organic materials for a variety of different applications. This is mainly because of their biocompatibility, biodegradability and low cost of production. Lignocellulosic biomass is the most promising renewable carbon-containing source on Earth. Depending on the origin and species of the biomass, lignin consists of 20–35% of the lignocellulosic biomass. After it has been extracted, lignin can be modified through diverse chemical reactions. There are different categories of chemical modifications, such as lignin depolymerization or fragmentation, modification by synthesizing new chemically active sites, chemical modification of the hydroxyl groups, and the production of lignin graft copolymers. Lignin can be used for different industrial and biomedical applications, including biofuels, chemicals and polymers, and the development of nanomaterials for drug delivery but these uses depend on the source, chemical modifications and physicochemical properties. We provide an overview on the composition and properties, extraction methods and chemical modifications of lignin in this review. Furthermore, we describe different preparation methods for lignin-based nanomaterials with antioxidant UV-absorbing and antimicrobial properties that can be used as reinforcing agents in nanocomposites, in drug delivery and gene delivery vehicles for biomedical applications.