Sulfonation modification of alkali lignin from wheat straw pulping spent liquid, carried out under normal pressure and medium temperature, was investigated, and the properties of the resulting sulfonated lignin were characterized. It was found that condensed lignin was degraded into lignin fragments with lower molecular weight by oxidation reaction, producing more active sites to react with formaldehyde, consequently forming more active hydroxymethyl groups for sulfonation. Therefore, it is feasible to carry out the sulfonation of alkali lignin under conditions of normal pressure and medium temperature. As higher contents of sulfonic group were introduced, sulfonated lignin with 1.49 mmol/g of sulfonation degree exhibits 96.9% of solubility at neutral aqueous solution and good surface activity. Compared to commercial lignosulfonate, sulfonated lignin produced by the present work contributes higher adsorption amount and zeta potential to cement particles, and hence shows better dispersion effect to the cement matrix.