Lignites are abundant coal resources, but they are low-quality fuel for direct combustion because of their high moisture content, high ash yield, and low calorific value. Upgrading technologies for lignites such as drying and pyrolysis have been widely investigated. Lignite conversion under mild conditions for producing ash:free, coals, value-added chemicals, and/or liquid fuels also deserves attention. This paper reviews recent developments in extraction and mild conversion of lignites. The related techniques, including sequential extraction, thermal dissolution, mild oxidation, and catalytic hydroconversion of lignites, are described in detail. In addition, the application of high-resolution mass spectrometry in determining lignite-derived products is presented. Future investigations on efficient utilization of lignites are also suggested.