The abundant and renewable nature of lignin obtained from wood renders it as a sustainable carbon resource for energy storage applications. However, their environmentally unfavorable processing conditions and limited energy storage performance prohibit the use of lignin-based carbon materials' use as supercapacitor electrodes. The material's properties require advancement to overcome the limitation of low specific capacitances. In this study, we report on the impact on the electrochemical performance of inherently hydrophobic lignin-based carbon fibers (LCF) by subjecting them to a mild plasma treatment. The electrode’s capacitance was thus increased by 20%, with better rate capability and energy-power performance (11 Wh/kg and 0.8 kW/kg) in the KOH electrolyte. The quantified improvements were attributed to the capacitive functional groups, and enhanced surface wettability, which increased ion accessibility to active surface area improving charge-transfer ability to the surface with more additional functional groups. Remarkably, the selected plasma conditions introduced mostly desirable functional groups that limited any parasitic faradaic reactions prone to affect the device's long-term cycling stability and self-discharge characteristics. Furthermore, the impact of different inherent and introduced oxygen surface functional groups, including COO−, COH, CO, and CO, on the capacitive performance of these fibers at different device conditions (such as cycling and electrochemical activation) was investigated in different aqueous electrolytes. To ensure environmental favorability, the electrospinning of lignin fibers was conducted using a high molecular fraction of lignin without the inclusion of any fossil-based co-spinning polymers.