Lignin is widely used as an alternative to fossil resources in industrial production. However, its applications are limited due to its wide molecular weight distribution and chemical heterogeneity. In this study, alkali treated lignin (KL) and dilute acid-alkali treated lignin (DAKL) were prepared and compared through analyzing the functional groups, antioxidant and antibacterial activity of lignin. The results showed that DAKL displayed a smaller weight-average molecular weight (756 g/mol) and higher purity (93.74%). Further results showed that high contents of phenolic, syringyl (S), and guaiacyl (G) in DAKL increased its antioxidant activity (IC50: 38.5 µg/mL). Furthermore, DAKL exhibited a more excellent antibacterial effect on Staphylococcus aureus (96.71%) and Escherichia coli (100%) due to (1) the presence of several phenolic substances in lignin that damaged and ruptured the bacterial cell membrane, causing leakage of cell contents and bacterial death and (2) small molecule weight of lignin that allow it to penetrate the bacterial cell membrane, changing the physiological conditions of bacterial cell fluid and leading to cell death.