In the last decade, lignin has received much attention as a feedstock to produce bio-based products. This study investigates the potential benefits of using lignin to mitigate the environmental impact of the road construction sector. An environmental life cycle assessment (LCA) of various top-layer bio-based asphalts using kraft lignin was conducted. From a cradle-to-grave perspective, lignin-based asphalts were compared with conventional asphalts. The results of the LCA revealed that the climate change impact of lignin-based asphalts could be 30–75% lower than conventional asphalts. For the other ten impact categories, trade-offs were observed. Overall, two key factors to make the environmental impact of lignin-based asphalts lower than conventional asphalts are 1) increasing the amount of bitumen-substituted and 2) using low-grade biomass fuels for process steam in the pulp mill. The substitution of weak filler with lignin was beneficial only for climate change and could lead to a worse overall environmental performance than conventional asphalts. Similarly, higher environmental impacts for lignin-based asphalts could be obtained if the pulp mill consumed natural gas to complete the energy balance to replace the part of the black liquor from which lignin is extracted. This study also includes an in-depth discussion on methodological choices such as the allocation methods for lignin, functional units, and asphalt layers considered. We believe that such a methodological discussion could be helpful to support future Product Category Rules for asphalt mixtures.