The invention relates to a method for treating lignin, wherein the method comprises the following steps: a) dissolving lignin into an aqueous composition, which contains a compound selected from the class of phenols, while keeping the temperature of the composition at 0-16° C.; and b) allowing the composition to react while keeping the temperature of the composition at 60-100° C. and the pH of the composition at a pH valise of 6-14. The invention relates further to a method for producing a binder composition and to different applications thereof.