The objective of this study was to investigate the potential for partially replacing phenol with kraft lignin in the phenol formaldehyde (PF) resin designed for application as an adhesive in the production of plywood. The kraft lignin, considered to be an environmentally friendly alternative to phenol, was precipitated from black liquor recovered from kraft pulping of softwood. Kraft lignin phenol formaldehyde (KLPF) resin was prepared in a one-step preparation with different additions of lignin. Replacing 50 wt% of the phenol with kraft lignin (50KLPF) was, under the conditions used, considered to be optimal with respect to resin viscosity, storage stability, and bonding ability. The resin consists of an integrated kraft lignin-phenol network. The hot-pressing time in the plywood manufacturing had to be increased by approximately 30% at 150 degrees C for the 50KLPF resin compared with that normally used for PF resin, in order to comply with plywood standard demands. The mechanical properties of test samples made from KLPF resins were equal to or better than those of test samples made from PF resin only.