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Due to its abundance, degradability, and low toxicity, lignin is a promising raw material for the preparation of nanomaterials. However, efficient encapsulation using lignin-nanomaterial for sustained-release medications remains a challenge. This study involves grafting &#946;-cyclodextrin (&#946;-CD), with a hollow toroidal structure, onto the enzymatic-hydrolysis lignin (EHL) to form CD-EHL. The modified lignin was next used to prepare hollow nanoparticles (LHNPs) via self-assembly to encapsulate the antitumor drug hydroxycamptothecin (HCPT). The results indicated that &#946;-CD improved the network structure of modified lignin molecules. Moreover, LHNPs that self-assembled using CD-EHL had an increased specific surface area and greater porosity, and exhibited a spherical hollow structure and stability in phosphate-buffered saline. The drug loading and encapsulation efficiency of HCPT were 70.6 &#177; 9% and 22.02 &#177; 2%, respectively. An <i>in vitro</i> study showed that lignin-based nanoparticles have low toxicity, and the modified LHNPs demonstrated a good sustained-release capability. This study broadened the potential application of lignin as a renewable biomass material.