Lignin has received wide attention due to the enormous renewable supply and potential use of this inexpensive organic raw material. We used straw lignin to partly replace bisphenol A for preparing epoxy resins. This process not only greatly reduces the environmental pollution caused by lignin, but also decreases the production cost of epoxy resins. The lignin coming from agricultural waste was modified by Mannich reaction. At the beginning, we would get the mixture after diethanolamine was reacted with formaldehyde for 2 hr. Then the modified lignin was prepared by adding dropwise the mixture into lignin solution. The contents of active groups, including phenolic hydroxyl and hydroxymethyl, in modified lignin by Mannich reaction had been improved effectively. In addition, lignin-based epoxy resins which we prepared by modified lignin have good thermal stability. POLYM. ENG. SCI., 54:2777-2784, 2014. (c) 2013 Society of Plastics Engineers