The invention relates to a lignin modified phenolic resin and a preparing method thereof, and belongs to the technical field of phenolic resin. The lignin modified phenolic resin is prepared from, by weight, 50-70 parts of lignin, 100-150 parts of phenol, 2-25 parts of an acidic hemicellulose liquid, 50-100 parts of alkaline hemicellulose liquid, 10-50 parts of soft water, 50-70 parts of phytate phosphorus resin, 1-15 parts of zeolite solid acid, 40-190 parts of formaldehyde, 2-20 parts of gel-type ion exchange resin and 1-15 parts of a nanometer composite catalyst. The preparing method includes the steps that the lignin, the phenol, the hemicellulose liquid, the soft water, the phytate phosphorus resin and the zeolite solid acid are added into a reaction kettle and reacted, then the formaldehyde and the nanometer composite catalyst are added, the mixture is washed, dried and smashed, then the gel-type ion exchange resin is added, and the lignin modified phenolic resin is obtained. The lignin modified phenolic resin is good in stability and low in production cost, and has the excellent size stability, forming processing performance and fire resistance.