This article describes that the modification of lignin by incorporation of aromatic scavengers (2-naphthol: AHN EOL and 1,8-dihydroxyanthraquinone: AHD EOL) during delignification process has improved the physical properties of the lignin fractions. Smaller fragments of lignin with high phenolic -OH content, increased solubility and antioxidant activity have led to improved inhibitive property of the modified lignin. The inhibition efficiency (84-93%) of both modified lignin (500 ppm) were observed to be better than unmodified organosolv lignin (EOL). It was deduced that the inhibition process was spontaneous and the inhibitors were mainly physically adsorbed onto the mild steel surface.