•Bio-polyols were produced via alkaline hydrolysis of kraft lignin for polyurethanes.•A high yield of polyols up to 92% was obtained, with suitable −OH numbers and Mw.•The Mw of lignin was reduced from 10,000g/mol to ∼3300g/mol at low temperature.•A higher temperature especially 350°C favored polyols of lower Mw ∼1400g/mol.•A longer reaction time produced polyols with lower aliphatic −OH number. Kraft lignin (KL) was successfully depolymerized into polyols of moderately high hydroxyl number and yield with moderately low weight-average molecular weight (Mw) via direct hydrolysis using NaOH as a catalyst, without any organic solvent/capping agent. The effects of process parameters including reaction temperature, reaction time, NaOH/lignin ratio (w/w) and substrate concentration were investigated and the polyols/depolymerized lignins (DLs) obtained were characterized with GPC-UV, FTIR-ATR, 1H NMR, Elemental & TOC analyzer. The best operating conditions appeared to be at 250°C, 1h, and NaOH/lignin ratio ≈0.28 with 20wt.% substrate concentration, leading to <0.5% solid residues and ∼92% yield of DL (aliphatic-hydroxyl number ≈352mgKOH/mg and Mw≈3310g/mole), suitable for replacement of polyols in polyurethane foam synthesis. The overall % carbon recovery under the above best conditions was ∼90%. A higher temperature favored reduced Mw of the polyols while a longer reaction time promoted dehydration/condensation reactions.