Polyurethane (PU), as a polymer material with versatile product forms and excellent performance, is used in coatings, elastomers, adhesives, and foams widely. However, the raw materials (polyols and isocyanates) of PU are usually made using petroleum‐derived chemicals. With the concern for depletion of petroleum resources and the associated negative impact on the environment, developing technologies that can use renewable raw materials as feedstock has become a research hotspot. Lignin, as an abundant, natural, and renewable organic carbon resource, has been explored as raw material for making polyurethanes because it possesses rich hydroxyl groups on its surface. Meanwhile, compared to vegetable oils, lignin does not compete with food supply and performance of the resulting products is superior. Lignin or modified lignin has been shown to impart the polyurethane material with additional functionalities, such as UV‐blocking ability, hydrophobicity, and flame retardancy. However, the utilization of lignin has encountered some challenges, such as product isolation, heterogeneity, aggregation, steric hindrance, and low activity. This paper summarizes recent research progress on utilizing lignin and modified lignin for bio‐based polyurethane synthesis with a focus on elastomers and foams. Opportunities and challenges for application of the lignin‐based polyurethanes in various fields are also discussed.