The quality and processibility of lignin-based carbon fiber will be governed by the pulping method used to extract lignin, the number of phenolic hydroxyls (Ph-OH), and the number of β-O-4 linkages. Additionally, it is still unclear what structural changes to lignin take place during the continuous production of carbon fiber derived from lignin. Moreover, the linearity of lignin can be increased by either polymerizing it or co-polymerizing it with another monomer. Unfortunately, the mechanism of polymerization is mostly unknown, which makes this process poorly controlled. Considering these challenges, upcoming research could concentrate on the quantitative investigation of the structure of lignin, the establishment of potential property relationships, the development of low-cost and efficient techniques for isolating lignin, and the structural examination of isolated lignin and the investigation of lignin polymerization mechanisms, which will help to improve its linearity.