Ligninolytic extracellular enzymes, including lignin peroxidase, are topical owing to their high redox potential and prospective industrial applications. The prospective applications of lignin peroxidase span through sectors such as biorefinery, textile, energy, bioremediation, cosmetology, and dermatology industries. The litany of potentials attributed to lignin peroxidase is occasioned by its versatility in the degradation of xenobiotics and compounds with both phenolic and non‐phenolic constituents. Over the years, ligninolytic enzymes have been studied however; research on lignin peroxidase seems to have been lagging when compared to other ligninolytic enzymes which are extracellular in nature including laccase and manganese peroxidase. This assertion becomes more pronounced when the application of lignin peroxidase is put into perspective. Consequently, a succinct documentation of the contemporary functionalities of lignin peroxidase and, some prospective applications of futuristic relevance has been advanced in this review. Some articulated applications include delignification of feedstock for ethanol production, textile effluent treatment and dye decolourization, coal depolymerization, treatment of hyperpigmentation, and skin‐lightening through melanin oxidation. Prospective application of lignin peroxidase in skin‐lightening functions through novel mechanisms, hence, it holds high value for the cosmetics sector where it may serve as suitable alternative to hydroquinone; a potent skin‐lightening agent whose safety has generated lots of controversy and concern.