Lignin is an abundant, aromatic, and renewable biopolymer present in plants. Traditionally, the major potential of lignin has been wasted by direct combustion of ligneous biomass. The scope of lignin utilization has been broadened to a great extent with considerable advances in research on the functionalization of the lignin polymer. Among the various chemical modification techniques of lignin, the introduction of phosphorus in the lignin biopolymer chains has significantly enhanced its functional properties such as thermal stability, adsorption of metal ions, and protection from UV radiations. This chapter covers the intriguing concept of phosphorylation, characterization techniques, and applications of phosphorylated lignin and its composites. In addition, future prospects in the domain of lignin phosphorylation are also highlighted.