Eucalyptus Kraft lignin was blended in various proportions with two different types of polyethylene (PE) (low-density polyethylene and post-consumer recycled [PCR]), with or without compatibilizer (PE-glycidyl methacrylate [GMA] or PE-2-hydroxyethyl methyl acrylate copolymers). Materials prepared by injection molding or extrusion casting were characterized for their thermal, antioxidant, antibacterial and mechanical properties. In addition, the photopermeability was assessed, as this property is specifically relevant to mulching applications. The use of compatibilizers enhanced the antioxidant properties which reached more than 3 h oxidation induction time when lignin was present at 20 wt% and beyond. Good antibacterial properties were obtained on Gram-positive bacteria when using PE-GMA as compatibilizer. The photopermeability of the materials was also reduced, reaching a transmittance lower than 5% throughout the whole measurement range (200-800 nm) in PCR. However, higher lignin contents led to a more brittle material and the overall processability of the material became more difficult, features that were not improved by compatibilizers. These materials are promising candidates for mulching film application, especially with PCR which still lacks high-volume market applications.