Abstract In this study, bio-based rigid polyurethane (PU) composite foams were prepared by a free-rising method, with the addition of wood particles (10 and 20 weight percent by the foam mass) and kraft lignin (5 and 10 weight percent by the polyol mass) as reactive reinforcing fillers. The resultant PU composites were evaluated for chemical structure, density, morphology, compressive properties, water uptake, and thermal stability. Fourier-transform infrared analysis confirmed the formation of characteristic urethane bonds in all foam samples. The foaming process was slowed down by the incorporation of lignin and wood particles. The apparent density of lignin-incorporated wood–PU composite foam ranged between 77 and 105 g/cm3. Compared with the neat PU foam, addition of wood particle resulted in decreased compressive properties and increased water uptake of the foams, whereas incorporation of lignin had a positive effect on the compressive properties and water resistance. In general, the PU foam sample with the incorporation of only 5 percent lignin (PUL5) exhibited the optimal physical–mechanical properties, with the compressive strength increased by 74 percent and 24-hour water uptake decreased by 28 percent compared with the control PU foam. Thermogravimetric analysis showed that the incorporation of lignin and wood particles did not significantly affect the thermal degradation pattern of foam but rather increased the mass of char residue.