Biomass processing industries and modern society are both interested in environmentally friendly plant-based polymers, such as lignin, to replace petrochemical derivatives. In this study, an n-butanol-based solvent system that can be produced through fermentation of cellulosic biomass, was used to fractionate hybrid poplar and isolate high purity lignin. The resulting unique glassy lignin fraction exhibited good melt-flow characteristics but poor mechanical behavior. Therefore, to produce a reusable and tough thermoplastic material, the lignin was reactively blended with glycidyl methacrylate modified polyethylene plastic using a high shear melt-mixing technique at 170 degrees C. Mechanical and rheological analyses revealed that the reactively processed blends with 30 wt % lignin have good compatibility between both polymers. Scanning electron microscopy, dynamic mechanical thermal analysis, and infrared spectroscopy data indicated improved interaction between lignin and the functional polyethylene matrix. The blends exhibited a thermal relaxation in the temperature range of 10 to 20 degrees C, because of the branched glycidyl methacrylate moiety. The optimal composition, consisting of 30% lignin, exhibited similar to 10 MPa tensile strength with 50% strain to failure; such a lignin-modified polymer may find use as packaging, as textile coatings, and in various horticultural applications.