A formaldehyde-free wood adhesive system consisting of kraft lignin and it polyaminoamide-epichlorohydrin (PAE) resin (a paper wet strength agent) has been investigated in detail. The lignin-PAE adhesives were prepared by mixing an alkaline kraft lignin Solution and a PAE Solution. Mixing times longer than 20 min had little impact on the shear strength of the wood composites bonded with the lignin-PAE adhesives. The shear strength of the wood composites bonded with the lignin-PAE adhesives increased and then flattened out when the press time and the press temperature increased. The shear strength and water resistance of the wood composites bonded with the lignin-PAE adhesives depended strongly oil the lignin/PAE weight ratio. Of the weight ratios studied, the 3:1 lignin/PAE weight ratio resulted in the highest shear strength and the highest water resistance of the resulting wood composites. The wood composites bonded with the lignin-PAE adhesives did not delaminate and retained very high strengths even after they underwent a boiling-water test. The lignin-PAE adhesives could be stored at room temperature for two days without losing their adhesion ability. PAE was the crosslinking agent in this lignin-PAE adhesive. Possible reactions between lignin and PAE are discussed in detail.