An efficient method for the preparation of water-soluble phosphated graphene for the first time is developed. Graphene oxide (GO) was synthesized through a modified Hummers' method and functionalized by phosphate groups with phosphorus trichloride and triethylamine in tetrahydrofuran (THF). The morphology and chemical structure of phosphorylated graphene oxide (PGO) and heat-treated PGO (PGO-400) were characterized by X-ray diffraction, Fourier transform infrared spectrometry, scanning electron microscopy, analytical X-ray spectroscopy, atomic force microscopy, diffuse-reflectance spectrometry, thermogravimetric analyses, differential thermogravimetric analysis, Brunauer-Emmett-Teller and Barrett-Joyner-Halenda methods, Raman spectroscopy, and X-ray photoelectron spectroscopy. The acidity of PGO and PGO-400 was measured by a back-titration method. PGO-400 offers extraordinary electronic and thermal properties, cation-exchange capacity, and water dispersibility. The combination of cation-exchange capacity and water dispersibility of PGO-400 offers a variety of applications in organic synthesis and adsorbent sciences.