The structural changes induced in fiber lignin by steam explosion was studied to better understand the effect of steam explosion conditions on bonding mechanisms of lignin containing fibers in self-binding fiber boards. In all the steam exploded lignin samples, the main lignin inter-unit linkage after 1 min treatment was the β–O–4´ alkyl aryl ether that accounts for up to nearly 80% of all inter-unit linkages. With increased steam explosion times a drastic decrease in the content of β-O-4 linkages was detected, which was accompanied with the formation of new phenolic units and decrease in molar mass. However, at the same time, some condensation of lignin occurred as well. After steam explosion, the lignin was more prone to thermally induced condensation reactions. The formation of the new phenolic groups during steam explosion, and the enhanced tendency to condensate during thermal processing, most likely contribute to the higher bonding ability of steam exploded fibers when manufacturing self-binding fiber boards.