Lignin, a renewable waste material of pulp and paper industries, was analyzed through Fourier-Transform Infrared Spectroscopy (FTIR) and found to be structurally similar to kraft lignin. Surface modification by addition of benzoyl peroxide and subsequent heating at 70°C caused generation of new functional groups in lignin. Efficacy of the crude lignin as well as that of the modified variety as a filler in nitrile rubber (NBR) has been evaluated. Rubber vulcanizates were analyzed for physico-mechanical properties, oil and fuel resistance, and thermal stability, and compared with conventional fillers like phenolic resin and carbon black. Modified lignin has been found to produce superior elongation, hardness and compression set properties compared to phenolic resin but inferior to carbon black. Resistance to swelling, however, depends on the type of oil or fuel, and modified lignin always showed better properties than carbon black. Both thermo-gravimetric analysis (TGA) and thermo-mechanical analysis (TMA) showed highest thermal stability for the modified lignin followed by phenolic resin and carbon black.