The demand for biodegradable, sustainable, and eco-friendly alternatives is growing in crop production and protection, which forces an urgent need for society to shift toward more sustainable agricultural development. In recent years, the development and research of lignin-based functional materials have gained increasing attention and impetus, and their use has become more widespread in sustainable agriculture. This review covers the latest research on the potential applications of lignin-based functional materials in plant protectants, sensors for pollutant detection, toxic element removal in soil and water, enzyme immobilization, plant growth regulators/biostimulants, hydrogels, and mulching films. Finally, future challenges and perspectives of lignin-based functional materials are discussed to provide a new strategy for the promotion of sustainable agriculture.