The potential of the formation of carbon fibers from sustainable, carbon rich resources such as Lignin has attracted both academic and industrial interests in the recent decades. Lignin is the second most abundant natural polymer after cellulose and the most occurring aromatic natural polymer, which is gained as a byproduct of the pulping industry. The high aromatic carbon content enhances theoretically the assumption of the possible formation of a turbostratic or even graphitic-like carbon crystal structure upon the thermal treatment. The literature demonstrates that lignin cannot be processed into carbon fibers with adequate mechanical properties due to its infusibility, poor thermal stability, the heterogeneity of the chemical structure, the wide molecular weight distribution, the etherified chemical structure and the high impurities content. In this research work we demonstrate what the key attributes are needed in order to produce high modulus carbon fibers based on lignin. Three different low sulfur-low ash lignin types: Sofwood lignin (BioChoiceTM); Hardwood lignin (AlcellTM) and annual plant lignin (Soda-Process) were used for this research work. The three lignin types were fully characterized using a range of analytical methods (TGA, DSC, Py-GC-MS, FT-IR, Raman-Spectroscopy and wide angel x-ray diffraction). The carbonization process of the three lignin types has been investigated. The temperature induced carbon structure formation from lignin has been fully investigated using the Raman-Spectroscopy, FT-IR, Py-GC-MS and WAXs. The heat treatment-induced structural changes of lignin and lignin-like compounds have been compared with that of PAN and MP. Different conclusions regarding the carbon crystal structure formation mechanism have been drawn and the key attributes of the formation of lignin based high modulus carbon fibers have been formulated. Keywords: lignin, carbon fibers, thermal stability, turbostratic and graphitic-like carbon crystal structure