In order to produce cheap activation carbon for dioxin adsorption in waste incinerator, waste plywood, pinewood, and coconut shell were used as raw materials to produce activated carbon via steam gasification on a lab-scaled rotary reactor. The influence of temperature, steam flow rate, and activation time on activated carbon yield and properties was investigated. Experimental results show that at 800 years, with 30-min activation time and steam/char ratio equal to 2, the yield of plywood activated carbon reached 60.5%, which was much higher than pinewood. The iodine adsorption value was 943 mg/g, which is close to pinewood. The pore structure analysis results show that the activated carbon derived from pinewood and plywood is similar. The pores with diameter of 2–5 nm were well developed, which was suitable for dioxin adsorption in waste incinerator. In the end, the computational fluid dynamics (CFD) and discrete element method (DEM) were used for modeling and optimization of the rotary furnace. Calculation results show that internal friction between the particles or the degree of anisotropy of the particles will cause the particles in the furnace to form a larger accumulation inclination, which benefits the mixing of the material in furnace. The results show that both the Eulerian-Eulerian two-fluid method and the DEM can simulate the movement of particles in the rotary furnace.