Lignin is a complex, abundant aromatic biopolymer with great potential to contribute toward the development of sustainable materials and chemicals. However, its recalcitrant structure creates significant challenges for efficient utilization. In this context, oxidative functionalization has emerged as a key strategy to enhance the reactivity of lignin and thus enable the production of value-added products. This chapter examines various oxidative methods, including ozonolysis, oxygen/air oxidation, hydrogen peroxide oxidation, enzymatic oxidation, and metal-catalyzed oxidation. Each method has specific advantages, ranging from environmental friendliness to selectivity, but also many challenges, such as the control of over-oxidation and efficiency enhancement. So far, major bottlenecks toward industrial application have been the heterogeneity of lignin, poor activity, and scalability of catalysts. Further research efforts are necessary in the direction of designing advanced catalysts, exploration of biocatalytic routes, and integration of oxidative processes into larger biorefinery schemes. This of course requires techno-economic analysis and life cycle assessment that stipulates the feasibility and environmental impact of these methods. If the challenges are resolved, it will unleash the potential of lignin as a renewable feedstock for the chemical industry.