Large-scale production of high-quality graphene is very critical for practical applications of graphene materials and devices. Exfoliation of graphite in an aqueous solution of surfactants is one of the most promising approaches to produce graphene. In this study, a novel anionic surfactant [sulfonated used engine oil (SUEO)], which was prepared from used engine oil, was employed to exfoliate the graphite nanoplatelets into graphene sheets in an aqueous solution under sonication to form a stable dispersion. The efficiency of SUEO for exfoliating and dispersing graphene was investigated and compared with that of traditional surfactants, such as sodium dodecyl sulfate, sodium dodecyl benzene sulfate, cetyl trimethyl ammonium bromide, and polyvinylpyrrolidone. Result showed that the graphene dispersion with excellent stability had a higher concentration (0.477 mg/mL) than others at 0.5 g/L optimal SUEO dosage in 4 h sonication time. The superior performance of SUEO can be attributed to its special molecular structures, whose hydrophobic moieties contain cycloalkanes/aromatics with different molecular weights and/or side chain -R with different lengths. Structural diversities are very helpful to the "jigsaw-puzzle" process on the graphene surface, where the total interfacial energy of the mixture system was minimized. Microscopic (SEM, TEM, and AFM) and spectroscopic (XRD, XPS, and Raman) measurements revealed that the dispersion consisted of few-layer graphene sheets with lower levels of defects or oxidation. This study presents a new class of dispersing agents for graphene that assists in the exfoliation process in water with high concentration and the stabilization of the graphene sheets against reaggregation.