Given the rise in demand for sustainable renewable biofuels and promising developments in cellulosic ethanol, the valorization of lignin has become essential for biorefining operations especially in today's low-cost energy production state of affairs. In the past 40 years, numerous efforts have been devoted to incorporate lignin and lignin derivatives into commercial polymeric materials. One of the promising strategies is to utilize multifunctional lignin macromolecules or oligomers as the replacement of polyols during polyurethane synthesis. In this paper, recent advances in fabricating polyurethane foams, films and adhesives with modified or unmodified lignins are examined. The mechanical and thermal properties of these lignin-based polyurethanes were correlated to their formulations, lignin molecular weight and polydispersity as well as the structural features of different lignin preparations. Recalcitrance and strong intermolecular interactions of lignin macromolecules are known to prevent them from effective incorporation into other polymeric materials, covalently or noncovalently. Therefore, this article intends to summarize the methods that improve the reactivity of lignin through chemical modification such as depolymerization, demethylation and chain extension. Finally, future developments and applications will be examined with a special emphasis on tailoring lignin structure to specific applications.