Natural polymers are bioactive compounds that are used in the treatment of several disorders. Natural lignin, an amorphous polymer, offers significant potential for use as a building block in the production of bio-renovation materials. This study used an alkaline solvent technique to extract lignin from two Egyptian cotton cultivar byproducts, Giza 86 and 90. We then created nano-lignin to recycle cotton stalks into an environmentally beneficial product. The characterization of L86, L90, LNP86, and LNP90 was carried out using particle size, zeta potential, FT-IR, and TEM. Antioxidant activity using the DPPH assay and antimicrobial activity were determined for lignin and nano-lignin. Seven pathogenic bacteria (Bacillus cereus, Staphylococcus aureus, Staphylococcus sciuri, Salmonella typhi, Salmonella enterica, Escherichia coli, and Pseudomonas aeruginosa) and five mycotoxigenic fungi (Aspergillus flavus, Aspergillus ochraceus, Aspergillus niger, Fusarium proliferatum and Penicillium verrucosum) were used for antimicrobial activity. The results showed high antioxidant efficiency for LNP90, with an IC50 of 10.38 µg/mL. The antimicrobial activity showed positive growth inhibition for all studied microorganisms, with significant differences in nano-lignin compared to ordinary lignin. lignin and nano-lignin were effectively applied to treated textiles for medical purposes. The study concluded that single-use medical textiles with anti-microbial and anti-oxidant properties, made from lignin and nano-lignin, could benefit patients intolerant to antibiotics.