Lignin is a major component of wood, the most widely used raw material for the production of pulp and paper. Although the biochemistry and molecular biology underpinning lignin production are better understood than they are for the other wood components, recent work has prompted a number of re-evaluations of the lignin biosynthetic pathway. Some of the work on which these revisions have been based involved the investigation of transgenic plants with modified lignin biosynthesis. In addition to their value in elucidating the lignin biosynthetic pathway, such transgenic plants are also being produced with the aim of improving plant raw materials for pulp and paper production. This review describes how genetic engineering has yielded new insights into how the lignin biosynthetic pathway operates and demonstrates that lignin can be improved to facilitate pulping. The current technologies used to produce paper are presented in this review, followed by a discussion of the impact of lignin modification on pulp production. Fine-tuned modification of lignin content, composition, or both is now achievable and could have important economic and environmental benefits.