Herein, a series of poly(vinyl alcohol) (PVA)–lignin hydrogel composites was synthesized by crosslinking both unfractionated and fractioned lignin of varying molecular weights directly with PVA via a condensation reaction involving glutaraldehyde (GA) as the crosslinker. The fractionated lignin was obtained from a liquid–liquid extraction process of bulk lignin obtained from Kraft black liquor. The mechanical properties of the hydrated PVA–lignin composites were characterized using ultimate tensile strength (UTS) testing, dynamic mechanical analysis (DMA), and mechanical indentation. Most notably, soft composites containing 40 wt % fractionated lignin and 3 wt % GA exhibited 2 orders of magnitude increase in UTS when compared to neat PVA. The storage moduli obtained from DMA were used to calculate the molecular weight between crosslinks (M C) of the various soft composites, where a direct correlation between enhanced mechanical properties and lower M C for soft composites containing fractionated lignin was observed. Finally, the hydrated network structure of the hydrogels was directly imaged using scanning electron microscopy. These images showed a more disrupted network structure for soft composites containing unfractionated lignin, potentially explaining the unpredictability in mechanical properties observed for these composite hydrogels.