Lignin is a complex of organic polymers that are abundantly present in the plant cell wall which considered of emerging substrates for various kinds of value-added industrial products. Lignin has potential use for the production of green nanomaterials, which exhibit improved or different properties corresponding to their parent polymers. Nano lignin has received significant interest in recent years due to its applications in numerous fields. Lignin, the abundant and limited functionality has challenges for its potential uses. Creating advanced functional lignin-derived material like lignin nanoparticles (LNPs) which significantly alter the biological process has great potential for its applications. In the fields of biotechnology, several lignin extraction processes from various raw materials and diverse synthesis techniques, including acid precipitation, dialysis, solvent shifting/solvent exchange, antisolvent precipitation, homogenization, water-in-oil (W/O) microemulsion, ultra-sonication, interfacial crosslinking, polymerization, and biological pathway can be employed to produce LNPs. The scientific community has recently become more concerned about the transformation of lignin to lignin nanomaterials, including nanoparticles, nanocapsules, nanofibers, nanotubes, and nanofilms. Recent research has shown that lignin nanoparticles (LNPs) are: non-toxic at adequate amounts (both and ), are economical, and can be biodegradable by bacteria and fungi. In promising studies, LNPs have been investigated for their potential applications in gene delivery systems, drug carriers, biocatalysts, tissue engineering, heavy metal absorbers, encapsulation of molecules, supercapacitors, hybrid nanocomposites, and other applications. This current review addresses the recent advances in the synthesis of LNPs, their advanced application in different areas, future perspectives, and challenges associated with lignin-based nanomaterials.