Sulfuric acid lignin (SAL), which is formed as a by-product during the production of bioethanol from woody biomass, was solubilized and functionalized by hydrothermal reaction. SAL could be easily dissolved in an alkaline medium, especially sodium hydroxide solution, by this reaction. The soluble part of the reaction products (S-HSAL) could be dissolved at neutral pH. IR spectrometric analysis of SAL revealed that hydrophilic groups were introduced in it during the reaction. The dispersibility of S-HSAL was increased by sulfonation (SS-HSAL), and it was found to be an effective dispersant for gypsum paste. (c) 2008 Elsevier Ltd. All rights reserved.