A practical graft sulfonation process was developed to synthesize a lignin-based superplasticizer using acid-precipitated lignin from wheat straw black liquor as raw material. The graft-sulfonated lignin, prepared in optimal reaction conditions, was named GSL. The properties of GSL in a cementitious system were investigated. The adsorption isotherms of GSL fractions separated by ultrafiltration and the thickness of their absorbed films on cement particles were measured to reveal the dispersion mechanism. Also, it was found that the molecular weight of graft-sulfonated lignin increased with the dosage of acetone and formaldehyde, but having too high a molecular weight reduced its dispersive performance. High sulfonic group content in graft-sulfonated lignin severely inhibited the increase of molecular weight, resulting in a decrease of dispersive performance. GSL has stronger compressive strength enhancement in concrete and lower hydration heat temperature than the commercial naphthalene-sulfonated formaldehyde superplasticizer. Moreover, the strong dispersion of GSL with high molecular weight is mainly attributed to strong steric hindrance among cement particles.