A functional lignin-modified polyvinyl alcohol material was prepared by in-situ copolymerization and alcoholysis of vinyl acetate and functional lignin. We then investigated the molecular functional groups, mechanical properties, thermal properties and flame retardancy of the materials by using Fourier-transform infrared spectrometer, universal testing machine, differential scanning calorimeter, thermal gravimetric analyzer, scanning electron microscope, limiting oxygen indexer and horizontal vertical burning tester. The results show that with increase in functional lignin content, the limiting oxygen index, combustion grade and glass transition temperature of the functional lignin-modified polyvinyl alcohol film increased. Both tensile strength and elongation at break increased first and then decreased with increasing functional lignin content. When the functional lignin content was 15%, these two indices reached their maximum values. As the functional lignin content increased, the melting temperature of the material gradually rose after a sudden drop. When the functional lignin content was 5%, the melting temperature was the lowest.