A protocol for the fractionation of lignin with 1-butanol as solvent has been proposed in order to improve the utilization of industry alkali lignin. 1-butanol soluble lignin (BSL) was used as a building block for temperature-sensitive hydrogel with N-isopropylacrylamide (NIPAAm) through graft polymerization. The result shows that 1-butanol fractionation is an effective method to improve the molecular weight homogeneity of lignin (PDI, 2.5 to 1.83) and increase the hydroxyl group content (0.585–1.793 mmol/g). The incorporation of BSL into the temperature-sensitive hydrogel can enhance the thermal stability and increase the hydrophobicity of the gel, which leads to a decrease in lower critical solution temperature (LCST). In addition, the compression strength, swelling ratio, and pore size of the gel can be adjusted by the dosage of lignin. This stimuli-responsive gel, with an LCST around 32 °C, is expected to be applied in the agricultural field as a pesticide carrier by stimulating release and absorption properties based on the change in natural environmental temperature.