A study was conducted on graft copolymerization of Kraft lignin with 2-propenamide (acrylamide). The copolymerization process was carried out via a free radical reaction using methanol as the reaction medium, ferrous ion as the catalyst and benzoyl peroxide as the initiator. The formulation of lignin-acrylamide graft copolymer (PLA) was verified by infrared (IR) spectroscopy and Differential Scanning Calorimetry (DSC) analyses. Thermogram observations showed that there were two Tg values indicating that the yield was a copolymer. Then, the performance of the PLA as a polymeric thinning agent for aqueous bentonite mud was evaluated. The rheological performances of the copolymer were compared with that of a commercial thinner (lignosulfonate). At the optimum dosage of 0.3% of total mud volume, the PLA acted more effectively as a thinner and also as an agent for controlling filtration loss than did the lignosulfonate. Unlike the commercial lignosulfonate, the newly formulated thinner (PLA) showed better thinning performance at a high temperature of 190°C. Furthermore, the PLA was more tolerant than lignosulfonate towards salt contamination.