Lignin is one of the major contributing factors toward the recalcitrance of lignocellulosic biomass. Understanding the process of lignin degradation in natural biological processes will provide useful information to develop novel biomass conversion technologies. Functional group changes in the lignin entities during the process may contribute to the cellulose degradation (utilization) by the microorganisms. In this study, compositional and advanced Fourier transform infrared, pyrolysis gas chromatography/mass spectrometry and 13C cross polarization/magic angle spinning nuclear magnetic resonance analysis were performed to explore the mechanism of biodegradation of wheat straw by Streptomyces viridosporus T7A. The results indicated that S. viridosporus T7A removed lignin and hemicelluloses as indicated by the increased carbohydrate/lignin ratio. Significant modification of carbonyl and methoxyl groups in the complex lignin structure was also evident. Most importantly, the quantitative results showed that lignin degradation was featured by deduction of guaiacyl unit. The results provide new insight for understanding lignin degradation by bacteria.