A laboratory-scale continuous tubular flow reactor system has been developed for fast HTL (hydrothermal liquefaction) of lignin, adopting the nozzle reactor concept with a counter-flow mixing design. The reactor is capable of very fast heating and tolerating solid particles suspended in the liquid stream flowing through the reactor. The system has been tested for fast HTL of lignin residues from steam explosion, which was prepared and continuously pumped into the reactor in the form of a slurry solution of 25 wt. % lignin (125 µm in size) in water and 2 wt. % of cooking oil as emulsifier. This paper presents and analyses the development, the emulsification study, and the first test of the nozzle reactor design for fast HTL of lignin.