Naturally occurring xanthan gum (XG) has much commercial importance because of its excellent physicochemical, eco‐friendly, and non‐toxic properties. It is used in various applications like protein extraction, wastewater treatment, tissue engineering, drug delivery, food packaging, and so forth. XG is a natural material, and it has some limitations related to the mechanical stress, thermal stability, and hydration. To overcome the limitation, XG can be modified by adding third component or modification of operation for specific applications. XG can be modified by physical, genetically, enzymatically, or chemical processes. Revamped XG also enhances the efficiency toward adsorbing toxic metal ions and organics from synthetic or industrial effluents. The emphasis of present review article is to address the structural characteristics along with the focus on the developing chemically modified XG like grafted, cross‐linked, nanocomposites, and functionally modified biopolymer. However, this review commences thorough discussion on numerous ways of modifications, which can be attempted in XG structure, expanding its applications for heavy metal ion along with dye removal.