Conventional fossil fuel sources predominantly govern the manufacture of dispersants today, and their utilization frequently results in significant pollution and environmental degradation. Lignin, a raw material, is abundantly present in agricultural waste and black liquor from the pulp and paper sector. Recent research has extensively explored the development of lignin for industrial applications. This chapter provides a thorough overview of lignin preparation and its modifications, including sulfonation, etherification, sulfomethylation, and oxidation. These modifications generally improve its surface activity, dispersive capacity, and absorptivity, thereby broadening its industrial applications. Numerous factors can affect the efficacy of lignin dispersants. The performance of the lignin dispersant is influenced by the source of lignin, its concentration, chemical structure, molecular weight, and the degree of sulfonation and methylation. The uses of lignin dispersants in diverse industrial approaches are critically examined. The structural heterogeneity of lignin presents challenges for its application as a dispersant. However, the existence of amphiphilic molecules imparts both hydrophilic and hydrophobic sites to lignin, enhancing the capabilities of the dispersant. The low-cost modification of lignin requires investigation. A feasibility analysis of lignin as a dispersant must be conducted to fully comprehend its potential and encourage industry for lignin-based product development.