A relatively straightforward green method to fabricate robust hydrophobic sponges for effective removal of oil pollutants and other organic contaminants was developed. These sponges were constructed from bio-sources: citronellal and palmitic acid-modified aminoethyl cyclodextrin-sodium phytate-chitosan (ACCTCS). The modified sponge exhibited desirable mechanical properties and strong hydrophobicity with a water contact angle (WCA) of 147.8°. Scanning electron microscopy showed that the ACCTCS sponge had a highly porous structure that was particularly suitable for organic component absorption. The sponge exhibited excellent absorption capacities for n-hexane, trichloromethane, vacuum pump oil, and peanut oil (47.9, 32.3, 32.6, and 32.2 g/g, respectively). The removal rate of oil was more than 80% (>26.2 g/g) after 10 absorption-desorption cycles. The ACCTCS sponge also showed good oil/water and organic components/water separation performance. The bio-source materials, green preparation method, and new absorbed-oil recovery strategy provided a novel pathway to construct multifunctional absorbents for oil/water separation in industrial wastewater.