A modified alkali lignin (AL) was synthesized by introducing beta-cyclodextrin (beta-CD) into AL with epichlorohydrin (EPI) copolymerization, which resulted in incorporating beta-CD with AL by ether linkage. As a dispersant, beta-CD copolymerized AL (beta-CD-AL) was added into coal water slurry and its efficiency was evaluated. The effects of beta-CD content on the performance of beta-CD-AL were investigated via analyzing dispersity, zeta potential, and adsorption capacity. The results illustrated that beta-CD-AL behaved better dispersion owing to the high slurry concentration at fixed apparent viscosity, which was mainly attributed to the synergistic effects of electrostatic repulsive force and steric hindrance. Steric hindrance originated from the side chain of beta-CD gives better stability and less adsorption amount.