The chemical characteristics of methanol soluble lignin separated from Eucalyptus globulus by steam explosion were clarified by measurement of number-averaged molecular weight, weight-averaged molecular weight, and phenolic hydroxyl group. It was found that the methanol soluble lignin separated from the exploded wood at a steam pressure of 3.5 MPa and a steaming time of 5 min was the most adequate raw material for the synthesis of epoxidized lignin, i.e. lignin epoxy resin. The thermosetting behavior of epoxidized lignin was almost the same as that of commercial bisphenol A resin. According to E-Screen assay, the methanol soluble lignin, a raw material of epoxidized lignin, did not show estrogenic activity. Since the methanol soluble lignin was easily degraded by the lignin-degrading enzymes, the epoxidized lignin seems to be a biodegradable resin in waste treatment after its use.