Each year, 50 to 70 million tonnes of lignin are produced worldwide as by-products from pulp industries and biorefineries through numerous processes. Nevertheless, about 98% of lignin is directly burnt to produce steam to generate energy for the pulp mills and only a handful of isolated lignin is used as a raw material for the chemical conversion and for the preparation of various substances as well as modification of lignin into nanomaterials. Thus, thanks to its complex structure, the conversion of lignin to nanolignin, attracting growing attention and generating considerable interest in the scientific community. The objective of this review is to provide a complete understanding and knowledge of the synthesis methods and functionalization of various lignin nanoparticles (LNP). The characterization of LNP such as structural, thermal, molecular weight properties together with macromolecule and quantification assessments are also reviewed. In particular, emerging applications in different areas such as UV barriers, antimicrobials, drug administration, agriculture, anticorrosives, the environment, wood protection, enzymatic immobilization and others were highlighted. In addition, future perspectives and challenges related to the development of LNP are discussed.