The mysteries of chemical structures and properties of lignin are gradually being unveiled. In parallel, lignin is gaining ground as a versatile resource for the development of stimuli-responsive materials with environmentally friendly, high-performance, and multifunctional characters. This review focuses on synthesis and mechanisms of lignin-based stimuli-responsive materials, highlighting the chemical structures linked to responses to various different stimuli, such as pH and temperature. We also highlight applications of these materials in drug carriers, bioimaging, shape memory, strain sensors, and substance detection, with the objective to showcase the untapped potential of lignin, challenging the prevailing notion that lignin is merely a by-product of the pulp industry. Finally, we identify challenges and propose future directions for the development of lignin-based stimuli-responsive materials.