Surfactant mediated exfoliation of multilayer graphene and its effects on phenanthrene adsorption were investigated using a passive dosing technique. In the absence of surfactant (sodium cholate, NaC), multilayer graphene had higher adsorption capacity for phenanthrene than carbon nanotube and graphite due to the higher surface area and micropore volume. The observed desorption hysteresis is likely caused by the formation of closed interstitial spaces through folding and rearrangement of graphene sheets. In the presence of NaC (both 100 and 8000 mg/L), phenanthrene adsorption on graphene was decreased due to the direct competition of NaC molecules on the graphene surface. With the aid of sonication, multilayer graphene sheets were exfoliated by NaC, leading to better dispersion. The degree of dispersion depended on the graphene-NaC ratio in aqueous solution rather than critical micelle concentration of NaC, and the good dispersion occurred after reaching adsorption saturation of NaC molecules on graphene sheets. In addition, exfoliation weakened the competition between phenanthrene and NaC and enhanced the adsorption capacity of graphene for phenanthrene due to exposed new sites. The findings on exfoliation of graphene sheets and related adsorption properties highlight not only the potential applications of multilayer graphene as efficient adsorbent but also its possible environmental risk.