The high-value utilization of lignin for preparing high performance and multifunctional waterborne polyurethane (WPU) is a fascinating subject but still a challenge due to its low reactivity. Herein, highly reactive lignin with low molecular weight of 1398 Da and high hydroxyl groups of 12 mmol/g was employed as biopolyol to directly polymerize with isocyanate to prepare lignin-based WPU (LWPU). The integration of lignin to polymer backbone was conducive to the construction of strong H-bond interactions and more rigid hard-segment-rich domains, achieving uniform and stable LWPU emulsions. When the lignin substitution amount was 40 %, the mechanical strength, Young’s modulus and toughness of the formed LWPU-40 films were improved to 12.51 and 272.25 MPa, 28.54 KJ/m3, increased by 13, 84 and 17 times than those of WPU, respectively, meanwhile the elongation at break was 370.44 %. Moreover, LWPU as coatings possessed fast film-forming ability, high adhesion strength, waterproofness and UV protection. Compared with commercial WPU (C-WPU), the surface and through drying time of LWPU-40 coating were shortened by 2 and 1.6 times, respectively. Moreover, the adhesive strength of LWPU-40 increased to 44.79 MPa, and could maintain initial 87.3 % after 48 h of water immersion. Therefore, this work proposes a novel insight of high-value utilization of lignin, simultaneously presents a feasible approach to develop high performance and multifunctional WPU coatings.