Wheat straw soda lignin was modified and characterized by several qualitative and quantitative methods such as (31)P NMR spectroscopy to evaluate its potential as a substitute for polyols in view of polyurethane applications. Chemical modification of the lignin was achieved with propylene oxide to form lignopolyol derivatives. This was performed by a two-step reaction of lignin with maleic anhydride followed by propylene oxide and by direct oxyalkylation under acidic and alkaline conditions. The physical and chemical properties of lignopolyols from each method and the subsequent chain-extended hydroxyl groups were evaluated. Direct oxyalkylation of lignin under alkaline conditions was found to be more efficient than acidic conditions and more effective than the two-step process for preparing lignopolyol with higher aliphatic hydroxyl contents.