Fire hazards have long threatened human safety, and the flammability of polymer materials exacerbates fire risks. Traditional halogenated flame retardants pose severe environmental risks, making the development of green and high-efficiency flame-retardant materials an urgent priority. As an abundant renewable biomass resource, lignin exhibits inherent flame-retardant potential, yet it suffers from drawbacks such as poor compatibility with polymer matrices. Benefiting from the nano-size effect, lignin nanoparticles (LNPs) feature the merits of being green and renewable, high-efficiency char formation and synergistic flame retardancy, which effectively solve the problem of poor dispersibility of flame retardants in polymer materials. At present, the development of green and high-efficiency flame-retardant materials based on LNPs has become a research hotspot. Following the framework of “structure-mechanism-application-future development”, this review systematically summarizes the preparation technologies (chemical methods, physical methods and physicochemical hybrid methods), functionalization strategies (surface functional group modification and construction of composite flame-retardant systems), flame-retardant mechanisms (gas-phase free radical scavenging, condensed-phase char formation and synergistic flame retardancy) of LNPs, as well as their applications in thermoplastic resins, thermosetting resins and biomass-based materials. This review systematically analyzes the effects of key influencing factors including particle size, dispersibility and compatibility on the flame-retardant properties of LNPs, and further puts forward the core challenges and future research directions of LNPs. This review aims to comprehensively collate the research status of LNPs flame retardants, highlight their core value in promoting the transformation of the flame-retardant industry toward net-zero emissions and circular economy, build a bridge between fundamental research and industrial application, and provide a systematic reference for the innovative development of high-performance and eco-friendly flame-retardant materials.