Lignite’s large abundance, physicochemical properties and low cost are attractive for industrial wastewater remediation. However, directly applying lignite for wastewater treatment suffers low efficiency. Here, we synthesize highly efficient zero-valent iron (ZVI)-decorated lignite carbon through the in-situ carbonization of a lignite and FeCl2 mixture for heavy metal removal. The effect of carbonization temperature on the morphology, structure and crystallite phases of ZVI-decorated lignite carbons (ZVI-LXs) was investigated. At an optimized temperature (i.e., 1000 °C), ZVI particles were found evenly distributed on the lignite matrix with the particles between 20 to 190 nm. Moreover, ZVI particles were protected by a graphene shell that was formed in situ during the carbonization. The synthesized ZVI-L1000 exhibited higher Cu2+, Pb2+ and Cd2+ stripping capacities than pristine lignite in a wide pH range of 2.2−6.3 due to the surface-deposited ZVI particles. The maximum Langmuir adsorption capacities of ZVI-L1000 for Cd2+, Pb2+ and Cu2+ were 38.3, 55.2 and 42.5 mg/g at 25 °C, respectively, which were 7.8, 4.5 and 10.6 times greater than that of pristine lignite, respectively. ZVI-L1000 also exhibited a fast metal removal speed (~15 min), which is ideal for industrial wastewater treatment. The pseudo-second-order model fits well with all three adsorptions, indicating that chemical forces control their rate-limiting adsorption steps. The reduction mechanisms of ZVI-L1000 for heavy metals include reduction, precipitation and complexation.