A flow scheme was devised for the fractionation-purification of sludge lignin material (mixture of hardwood and softwood) used in the synthesis of a hardboard adhesive. Infrared spectroscopy, proton and carbon-13 nuclear magnetic resonance spectroscopy was used to assign the structure of the sludge lignin. The structural characterization indicated appreciable bond cleavage-rearrangement, and subsequent generation of additional acidic/ketone linkages, p-hydroxyphenyl units and saturated hydrocarbons. Additionally, the sludge lignin based extracts showed good adhesive bonding properties when used in a blend.