Two lignin-containing cellulose nanofibril (LCNF) samples, produced from two unbleached kraft pulps with very different lignin contents, were used to produce reinforced polyvinyl alcohol (PVA) hydrogels. The effects of LCNF loading (0.25–2 wt %) and lignin content on the rheological and mechanical properties of the reinforced hydrogels were investigated. The 2 wt % LCNF-reinforced PVA hydrogels exhibited up to a 17-fold increase in storage modulus and a 4-fold increase in specific Young’s modulus over that of pure PVA hydrogel. Both the mechanical and rheological properties of LCNF-reinforced PVA hydrogels can be tuned by varying LCNF loading and LCNF lignin content. During LCNF production, lignin reduced cellulose depolymerization, resulting in LCNF with high aspect ratios that promoted entanglement and physical bridging of the hydrogel network. Free lignin particles generated during LCNF production acted as multifunctional nanospacers that increased porosity of the hydrogels. Because LCNFs were produced from unbleached chemical pulps, which have high yields and do not require bleaching, this study provides a more sustainable approach to utilize lignocelluloses to produce biomass-based hydrogels than by methods using commercial bleached pulps.