This report describes methods to enhance mechanical properties of a renewable thermoplastic rubber by incorporating functional graphene platelets into an equal-mass mixture of lignin, a feedstock from plant biomass, and a nitrile-butadiene rubber having 41 mol % acrylonitrile content (NBR41) that form a nanocomposite. Not all lignins yield mechanically strong material when they are combined with NBR41, and thus, limit its use for such rubbery products. Here, we evaluate different graphene oxides (GO) and reduced graphene oxides (rGO) dry-powders with different surface areas, functionality, and wettability in the synthesis of performance-enhanced nanocomposites of soft lignin/NBR41 matrix via a solvent-free, high shear reactive process. High surface area GO (HSGO) platelets with strong hydrophilicity exhibit good dispersion in the multiphase lignin/NBR41 composites with lignin dispersion varying from 200 to 2000 nm, resulting in superior reinforcement over other graphene derivatives. The addition of 1–4 wt % HSGO increased the tensile stress of the lignin/NBR41 thermoplastic rubber matrix by 60–160% (15–24 MPa) and the modulus by 200–700% (60–140 MPa). Scanning electron microscopy and small angle X-ray scattering results show that the well-dispersed HSGO platelets effectively disrupt the lignin-rich aggregates in NBR41 matrix, resulting in both strength and stiffness enhancements in the formed nanocomposites. This report on performance enhancement of lignin-based renewable polymers via the production of nanocomposite would increase potential for ‘finding the value of lignin’―a grand challenge associated with modern biorefineries.