Abstract A “waste-valorization” approach was developed to transform recalcitrant hydrolysis lignin (HL) from second-generation bioethanol production into multifunctional bio-based products. The hydrolysis lignin (HL) was extracted with aqueous acetone, yielding two fractions enriched in lignin and cellulose, respectively. The soluble hydrolysis lignin (SHL) was converted into anionic and cationic colloidal lignin particles (CLPs and c-CLPs). The insoluble cellulose-rich fraction was transformed into lignocellulosic nanofibrils that were further combined with CLPs or c-CLPs to obtain nanocomposite films with tailored mechanical properties, oxygen permeability and antioxidant properties. To enable prospective applications of lignin in nanocomposite films and beyond, CLPs and c-CLPs were also produced from a soda lignin (SL) and the influence of the lignin type on the particle size and ecotoxicity was evaluated. Finally, the carbon footprint of the entire process from hydrolysis lignin to films was assessed and an integration to industrial scale was considered to reduce the energy consumption. While most previous work utilizes purified lignin and pristine and often purified cellulose fibers to produce nanomaterials, this work provides a proof of concept for utilizing the recalcitrant lignin-rich side stream of the bioethanol process as raw material for functional nanomaterials and renewable composites.