Upcycling low‐valued materials and/or biobased wastes is a promising method to produce materials in an energy‐saving, sustainable way. Lignin is one of the underutilized biomasses and has been produced as a byproduct in paper‐making industry. Upcycling lignin into valuable products is key to solving problems associated with waste disposal, environmental pollution, and depletion of natural resources. One way to add values to lignin and its derivatives is to utilize them as sensors and adsorbents, in which toxic elements and materials can be detected and removed. In this review, we highlight the utility of lignin in the field of sensing and adsorbing metal ions. This review begins with the general overview of lignin as materials, followed by investigation of lignin and its derivatives in the detection and removal of metal ions. Lastly, we end this review with the prospects of lignin as sensors and adsorbents.