Many materials, man-made and natural, have a composite structure, i.e. they comprise two or more constituent materials with distinct differences. Concrete is a common example. It consists of sand or gravel, cement and water. Wood is also a composite. It has strong, crystalline cellulose structures glued together by hemicelluloses and lignin. The unique structure of wood can, however, not be processed as such using common industrial material processing techniques. For decades, the market for composite materials has witnessed small steps towards increased use of bio-based constituents instead of the petroleum-based ones and especially, bio-based/natural fibers instead of man-made glass fiber. A key driver for this change is the fact that natural fibers are often cheaper and lighter. Sustainability issues also play a part in this change. In this research, the main objective has been to develop technologies and competences enabling the production of novel composite materials, in which wood-derived, industrial kraft lignin and cellulose fiber are the main constituents. The lignin would thus replace the petroleum-based plastics as matrix constituent. The more specific objectives of the research were to determine the melt processability of kraft lignin, plasticize kraft lignin with case-suitable plasticizers to ease the processing of the material and produce kraft lignin-based composite test products reinforced with cellulose fiber. Kraft lignin was not processable without plasticization. Suitable plasticizers were found, the plasticized kraft lignin was melt compounded with cellulose fibers, and test samples were injection molded. DSC analysis was conducted and mechanical properties were measured. The initial tensile test results of the plasticized lignin reinforced with cellulose fibers were promising. Addition of cellulose fibers into plasticized lignin matrix improved mechanical properties of the lignin significantly.