Lignin, a significant byproduct of the pulp and paper industry, faces limited applications due to its inherent heterogeneity, low reactivity, and poor water solubility. However, sulfomethylation, a chemical modification process, has proven effective in enhancing lignin’s properties, making it more suitable for various industrial uses. This chapter offers a detailed overview of the sulfomethylation process, including the underlying chemical reactions, process conditions, and its impact on lignin’s molecular structure. By introducing sulfonate and methyl groups into lignin, sulfomethylation significantly improves water solubility, reactivity, and anionic charge density. These modifications broaden lignin’s utility, especially in applications requiring dispersants, adhesives, and binders. Additionally, the chapter explores the diverse industrial applications of sulfomethylated lignin, such as in concrete additives, gypsum board production, wood adhesives, and controlled-release fertilizers. The economic viability and environmental benefits of using sulfomethylated lignin are also discussed, emphasizing its potential to support more sustainable and eco-friendly industrial practices.