The morphology and thermo-mechanical properties of recycled polystyrene-based materials (rPS) reinforced with 5 and 15% lignin from kraft pulping of Eucalyptus nitens were studied. The lignin was modified through two esterification processes using either acetic or maleic anhydride, and changes in the structure of the esterified lignin functional groups were analyzed by Fourier transform infrared spectroscopy. The lignin was then incorporated into rPS by melt mixing. Torque variation in the process was evaluated, and the values were compared to those of neat rPS and virgin PS. The results show a plasticizing effect of lignin with a reduction in the torque values. The morphology, studied through scanning electron microscopy, shows a particle size reduction of acetylated and maleated lignin and a more homogeneous dispersion at 5%. The thermal behavior of the composites, studied through differential scanning calorimetry, does not show significant changes in the glass-transition temperature of rPS with the presence of lignin. The dynamic mechanical analysis shows an increasing storage modulus with increasing lignin content. Thermal stability, studied through thermogravimetric analysis, improved for composites containing 5% esterified lignin. The flexural modulus also increased with lignin addition. These results suggest that the thermal and mechanical properties of post-consumer recycled polystyrene can be significantly improved with only 5% esterified lignin.