Polyurethanes (PU) have drawn great attention due to their excellent mechanical properties and self-healing and recyclable abilities. Lignin is a natural and renewable raw material in nature, composed of a large number of hydroxyl groups, and has a great potential to replace petroleum polyols in PU synthesis. This review summarizes the recent advances in modification methods such as the liquefaction, alkylation, and demethylation of lignin, and a systematic analysis of how to improve the reactivity and monomer substitution of lignin during polyurethane synthesis for the green manufacturing of high-performance polyurethanes was conducted. Polyurethane can be used in the form of films, foams, and elastomers instead of conventional materials as a dielectric or substrate material to improve the reliability and durability of flexible sensors; this review summarizes the green synthesis of polyurethanes and their applications in flexible electronics, which are expected to provide inspiration for the wearable electronics sector.