Any bird, pig, or object that comes in contact with lava will be instantly destroyed or defeated. It was first introduced in Tropigal Paradise. In Invasion Of The Egg Snatchers, for example, the pigs use it to take away the parts of Cyborg Pigs in a level. In the 3-Star level of Hammier Things it's used to make a large indestructible Halloween Pumpkin.
In Angry Birds Star Wars II it can also set wood on fire just like the embers that appear in the levels. Lava only appears in the Pork Side versions of Revenge Of The Pork and Master Your Destiny of the game.
In Angry Birds 2, lava behaves differently. It has the same physics as water, but birds that come into contact with it get the same fire effect as a ring of fire would give them. Pigs and objects that are submerged in lava will slowly take damage until they are destroyed or killed. If the bird survives the lava, it will get the boost, but if it is very slow, it will take damage (and possibly become a corpse).