Lignin is an attractive renewable reinforcing agent for polyolefins, which is also an excellent free‐radical scavenger and promising low‐cost antioxidant for polymers, however, exhibiting poor compatibility with non‐polar polymers. In this work, modified polyolefins containing maleic anhydride group like polybond (PB) were used as compatibilizer and incorporated into polypropylene (PP) with lignin to improve the blending ability of the polar filler in the non‐polar matrix. The composite containing individual lignin possesses a much smaller elongation at break than neat PP, whereas owing to the significantly improved dispersion by compatibilizer, the incorporation of compatibilizer into PP/lignin blends gives rise to remarkably increased elongation at break. Besides, lignin greatly slows down the UV‐induced degradation of PP and dramatically enhances anti‐oxidant effect of PP composites in the existence of compatibilizer, in which the elongation at break of PP/PB/2%lignin retains 77% of its original value when it reduces by 92% for neat PP after 240 h of UV irradiation. POLYM. COMPOS., 40:2594–2601, 2019. © 2018 Society of Plastics Engineers