The surface modification of wet‐milled softwood lignin produced with the LignoForce System was successfully carried out in a one‐step aqueous process. Different hydrophobic molecules, including cetyl trimethyl ammonium bromide, poly(ethylene oxide), polyethylene‐block‐poly(ethylene glycol), dodecenyl succinic anhydride, and alkyl ketene dimer (AKD), were investigated to design the hydrophobicity of lignin with the objective of improving the adhesion and compatibility in polymer blends composed of polar lignin particles and, for example, nonpolar polypropylene (PP). AKD, among all of the investigated approaches, proved to be the simplest and most effective for significantly increasing the contact angle of lignin while preserving the original micrometer size of wet‐milled, spray‐dried lignin particles. This treatment led to a noticeable improvement in the stiffness of lignin–PP composite blends, with an increase of approximately 15% in Young's modulus. The compatibility of the AKD‐treated lignin with PP was assessed through tensile strength measurements and blend morphology observation, whereas the mechanism of AKD interaction with lignin was investigated with contact angle measurement, differential scanning calorimetry, Fourier transform infrared spectroscopy, and 1H‐NMR spectroscopy measurements. © 2017 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2017, 134, 45103.