Lignin is the only largest renewable aromatic resource in nature. Currently, most lignin is underutilized for low-value applications due to the complex structure and recalcitrant chemical properties. Over the past decades, extensive research has been devoted to valorizing lignin into aromatic N-heterocycles in the presence of nitrogen sources. It overcomes the element limitation, expands the products portfolio and would play a momentous role in value-added biorefinery concept. In this review, the latest research progress in the synthesis of N-heterocyclic compounds from lignin, lignin model compounds, and lignin-derived monomers (phenols, aromatic alcohols, aldehydes, ketones, and ethers) is presented. According to the structural characteristics of the products, these achievements are classified by the construction of five-, six-, and seven-membered N-heterocyclic compounds through one-step, multi-step, or one-pot multi-step reactions. Furthermore, the tailor-designed routes and catalytic systems, along with the reaction mechanisms/pathways involved are entirely discussed to elucidate the challenges regarding the structural complexity of lignin, the incompatible catalysis for C-O cleavage and C-N formation, as well as the nitrogen-heterocyclic ring construction. The prospects, future research efforts and process developments for the refining of lignin into aromatic N-heterocyclic compounds are outlined in terms of economy, environmental friendliness, and safety so as to draw some guidelines for lignin valorization.