Lignin as a by-product of fuel alcohol industry is used to prepare hard carbon materials by acetone extraction, stabilization in N2 at 300 °C, carbonization in N2 and subsequent H2 reduction at 800 °C. The effect of H2 reduction after carbonization process on the performances of the prepared samples is systematically studied and a simple mechanism is proposed. Excitingly, it is demonstrated that the process of H2 reduction has a favorable influence on both structures and electrochemical performances of pyrolysis sample and an obvious improvement of capacity performance is obtained with reduction treatment. A first discharge/ charge capacity of 882.2/550.5 mA h g−1 (coulombic efficiency (CE) of 62.4%) is achieved at 0.1 C (1C = 372 mA g−1), and even after 200 cycles at 2 C a charge capacity of 228.8 mA h g−1 (about 92.8% retention ratio) remains and CE is above 99% during cycles for H2 reduced sample. The fabulous electrochemical performance could be attributed to high purity of acetone-extracted lignin, low surface oxygen-containing functional groups and relatively high graphitization degree of reduction sample. In a word, both the simple pyrolysis process and excellent electrochemical performance make lignin-based hard carbon a promising anode material for high-capacity and high-stability lithium ion batteries (LIBs).