Due to the development and improvement of nations’ infrastructure, the percentage of paved roads has significantly increased. Bitumen, derived from fossil fuel is considered the most important binder material in case of bituminous road construction worldwide. Focusing on renewable materials as an alternative source for fossil fuels is necessary to meet the world’s increasing energy demand. Thus, this study focuses on the partial replacement of bitumen with a renewable and sustainable material, lignin, generated abundantly in the paper and biofuel industries. Two types of lignin are utilized separately as a partial replacement for control bitumen, and its influence on the properties of modified bitumen and bituminous mixtures is assessed. The laboratory tests demonstrated that the modified bitumen exhibited an enhanced softening point and increased brittleness. A decrease in penetration value was also observed when compared to the control bitumen. Further evaluation of the mechanical properties of lignin-modified bitumen mixtures revealed that Marshall stability and Indirect Tensile Strength (ITS) initially increased with the incorporation of lignin into bitumen. This enhancement was observed up to a certain percentage of lignin dosage. However, a further increase in dosage tends to decrease both mechanical properties. But, in the case of flow number property, it tends to decrease as lignin percentage increases indicating a shift towards material brittleness. Overall addition of lignin as a modifier in bitumen, enhanced properties of modified bitumen and bituminous mix performance.