The corrosion and scale inhibition properties of sodium lignosulfonate (SL) were investigated by determining the corrosion and scale inhibition efficiency, the polarization curve, the residual turbidity, and the polymorph of calcium carbonate (CaCO3) scale. It is found that, to a certain degree, SL has a positive corrosion inhibition effect at the higher dosage, whereas it accelerates the corrosion of carbon steel at the lower dosage. SL also has a good dispersibility to CaCO3, causing a small CaCO3 scale inhibition efficiency of maximum value of 2.5% at a dosage of 50 mg/L SL. Because there exist intrinsic limitations of SL without modification as a water treatment agent in a cooling water circulation system, the original SL was further chemically modified by grafting with acrylic acid monomer. The modified SL increases its negative charge density and hence an adsorption quantity on the active anodic sites in the electrochemical reaction. The corrosion inhibition efficiency of modified SL is consequently greatly improved. Compared with original SL, the scale inhibition effect of modified SL is better due to its contribution to distortion of the CaCO3 crystal lattice. The modified SL may be a potentially useful corrosion and scale inhibitor in a cooling water system.