Abstract: The present invention attains the foregoing and other objects of the invention by providing a method of forming a composite particle product from ligno-cellulosic material bonded together with water-insoluble lignin. The lignin has a relatively low molecular mass, e.g., less than 10,000 Daltons, and has a relatively high number of reactive functional groups. The lignin and material is then heated and compressed to promote bending and cross-linking between the lignin binder and the ligno-cellulosic material.