The influence of multifunctional polyelectrolytes on the dispersion of aluminum hydroxide particles was studied, in particular the influence of monomer units acting as functional groups, with respect to particle size and zeta potential. The conformation of polyelectrolytes adsorbed on aluminum hydroxide particles, which affects their dispersion abilities, was investigated via their adsorption isotherms and H-1 NMR spectral analysis. Furthermore, the functions of monomer units were evaluated by the calculation of the interaction energies between each monomer unit and aluminum hydroxide or H2O by density functional theory. Three multifunctional polyelectrolytes were compared: a terpolymer of acrylic acid (AA), 2-acrylamide-2-methyl propane sulfonic acid (AMPS), and N-vinylpyrrolidone (NVP) (P(AA/SA/NVP)), acrylic acid homopolymer (P(AA)), and a copolymer of AA and AMPS (P(AA/SA)). The most effective dispersant was P(AA/SA/NVP), which prevented further coagulation among the initial particles and shifted the zeta potential to the most negative value. The conformations of the adsorbed polyelectrolytes exhibited the following order of extended conformation (larger loops and longer tails): P(AA) > P(AA/SA/NVP) > P(AA/SA). From these results, we reasonably concluded that the prominent dispersing capability of P(AA/SA/NVP) was due to its preferred extended conformation on the particle surface due to a subtle balance between the moderate affinity of NVP and the relatively higher affinities of AA and AMPS for aluminum hydroxide in an aqueous solution and the hydrophobicity of the amide groups of AMPS.