To address the need to mitigate climate change and reduce carbon emissions, the road industry faces the challenge to reduce its dependence on fossil fuel-derived bitumen in asphalt pavement. This paper presents evaluation of lignin obtained from TNO FABIOLATM process as a sustainable alternative to traditional bituminous binders. DSC test determined the melting of the lignin, which aided in the selection of the blending temperature. The blending process achieved homogeneous dispersion and dissolution of lignin within bitumen, constituting 25 wt.% in the total binder. Rheological assessments, conducted using DSR revealed that the viscoelastic properties of the lignin-bitumen blend closely resembled those of penetration grade bitumen, suggesting the lignin potential as a viable substitute without compromising rheological performance. Furthermore, MSCR test results showed resistance to permanent deformation in the lignin-bitumen blend comparable to the penetration bitumen. Two asphalt mixtures were prepared, one with the reference PmB and another with the lignin-bitumen blend, as an alternative binder. Water Sensitivity Tests (WST) on both fresh and aged specimens revealed no detrimental effects on Indirect Tensile Strength Ratio (ITSR) values. These findings highlight the potential of lignin as sustainable alternative to bitumen, advancing road materials with reduced environmental impact.