Polyurethanes (PU) were synthesized from lignin by first preparing a prepolymer from esterified sugar‐based trihydroxyl compound xylaric acid and a 20 mol % excess of methylene diphenyl diisocyanate. The prepolymer was crosslinked with 5, 10, and 15 wt % of an industrial soda lignin, and polyethylene glycol was used to bring soft segments into the material structure. The total amount of bio‐based starting materials was as high as 35%. Evidence for the reaction between the prepolymer and lignin was observed using Fourier transform infrared spectroscopic analysis and 13C nuclear magnetic resonance spectroscopy. The thermal properties of the materials were investigated by differential scanning calorimetry (DSC) and thermogravimetric analysis (TGA). The mechanical and viscoelastic properties of the materials were determined by dynamic mechanical analysis (DMA). The glass transition temperatures (Tg) obtained from DSC and DMA showed a trend of increasing Tg with the increasing amount of lignin. A similar trend was observed with TGA for the increasing thermal stability up to 550oC with the increasing amount of lignin. The lignin‐polyurethanes obtained were stiff materials showing high Young's modulus values.