Abstract Lignin is the second‐largest natural aromatic polymer available on Earth. It plays a vital role in a plant's structural framework, which gives strength to the plant to sustain when facing adversities, and it also restricts it from being attacked by foreign entities such as insects and microorganisms. With significant properties, including biodegradability and being atoxic, it has immense possibility for high‐value applications such as antimicrobial agents, UV protectors, emulsion stabilizers, dye synthesis via its derivatives, carbon fibre, and biomaterials—lignin extraction from various lignocellulosic biomass (LCB) through different extraction methods. Further, after extraction, lignin is converted into nano‐lignin to broaden its applications through different routes. Due to high functional groups, nano‐lignin has a larger surface area and more reactivity. After nano‐lignin synthesis, it can be further modified through different chemical routes to increase the application area for specific end products. Therefore, this article summarizes the lignin extraction methods and nano‐lignin conversion routes, as well as the modification of lignin for its variety of applications. The article also provides the current technologies and future outlooks in lignin valorization for its potential applications in different fields.