Recent progress in nanocellulose production favors lignin-rich raw fibers due to their cost effectiveness, higher yield of unbleached pulp, and added benefits from residual lignin, positioning them as ideal substitutes for fossil-based materials in composites and packaging. Nonetheless, their application has been impeded due to their inferior mechanical properties. This study introduces a simplified method to enhance the strength of lignin-containing microfibrillated cellulose (LMFC) films using water as a plasticizer during drying. Both LMFC from unbleached pulps and lignin-free microfibrillated cellulose (MFC) from fully bleached industrial kraft pulp were prepared through an environmentally friendly and scalable method. Given the charged carboxylic groups from hemicellulose and residual lignin, the LMFC gel demonstrated greater colloidal stability compared to MFC. Moreover, lignin-rich films displayed heightened hydrophobicity and exceptional thermal stability (T_max > 345 °C). A significant improvement in tensile strength and Young’s modulus of LMFC films was achieved with an elevated drying temperature from 40 °C to above 90 °C, increasing tensile strength from 248 to 283 MPa and Young’s modulus by 84%. These improvements are attributed to the thermoplastic nature of lignin and the plasticizing effect of water at elevated temperatures. The longer fibers in microfibrillated films also improved the resistance to cracking in a folded state. The study highlights that enhancement of the properties of lignin-rich films can occur during the film making step itself, hinting at a sustainable, innovative method for creating robust and scalable materials for flexible devices, biocomposites, and packaging.