Biomass-derived materials are becoming increasingly crucial in the advancement of sustainable functional materials. Lignin, a naturally occurring aromatic biopolymer derived from plants, offers significant benefits such as cost efficiency, biocompatibility, and biodegradability, making it a focal point of research and application across various domains. As a cross-linked polymer, lignin possesses numerous functional hydrophilic and active groups that facilitate the development of lignin-based functional hydrogels (LFHs). Recent studies have made notable contributions to the design, fabrication, and advancement of ligninbased hydrogels, thereby enhancing their potential as purposespecific materials. This perspective presents a comprehensive overview of the fabrication strategies and emerging applications of LFHs, covering their roles in water treatment, smart responsive materials, wound dressings, and wearable flexible supercapacitors/ electronics. Additionally, the challenges and limitations inherent to these materials, rooted in polymer structure and chemistry, are discussed. This work aims to pave the way for future advancements in the design and sustainability of lignin-based hydrogels, ultimately expanding the possibilities for biobased functional hydrogels.