Drainage canal sediments in an industrial park are generally dredged to landfill in Taiwan. The objective of this study was to evaluate feasibility employing the sediment as an adsorbent for removal of dye. The sediment contained approximately 10% of organic matter and little heavy metals. Infrared (IR) analysis revealed that carboxyl was the most important functional group for methylene blue (MB) sorption. Canal sediment could remove the most MB from water at pH 8.0 and this removal increased with increasing temperature. The MB sorption was well described by the Langmuir, Dubinin–Radushkevich, and Temkin sorption isotherms at 10°C, but it showed good compliance with Freundlich isotherm at 25°C and 40°C. The MB adsorption was a spontaneous and endothermic reaction; its maximum calculated adsorption capacity (Qm) was 56.0 mg g−1 at 10°C by the Langmuir isotherm. The calculated values of enthalpy (ΔH°) and entropy (ΔS°) are 14.6 kJ mol−1 and 149.2 kJ mol−1, respectively. Only pseudo-second-order adsorption kinetic model successfully described the kinetics of MB onto the sediment at different operation parameters. Activation energy of MB adsorption calculated from Arrhenius equation was 16.434 kJ mol−1, indicating the binding between canal sediment and MB was a physical adsorption.