Lignin valorization for fuels and value-added products is essential to enhance the profitability and sustainability of biorefineries. Due to the complex and heterogeneous structure of lignin, technical barriers hinder the implementation of economic lignin utilization. Here, we summarize the major challenges facing lignin valorization processes. Different pretreatment methods, especially emerging combinatorial pretreatment approaches for isolating and tailoring lignin are introduced. To overcome the heterogeneity of lignin structure and improve lignin processability, advances in fractionation approaches including organosolv extraction, membrane technology, and gradient precipitation are analyzed and presented. Furthermore, progress in lignin valorization by thermochemical and biological conversion coupling with pretreatment and fractionation are systematically reviewed. Finally, we discuss advanced strategies and perspectives for future research involving biomass pretreatment, lignin fractionation and conversion processes.