Since cellulose is the most common biopolymer in the world, there has been a lot of interest in its nanoscale version called nanocellulose due to the growing demand for sustainable products. To validate nanocellulose as a key component in the shift to a bio‐based economy, this review provides a thorough and critical assessment of the valorization of cellulose into nanocellulose, highlighting its unique properties, cutting‐edge extraction methods, surface modifications, and multiple applications. The study thoroughly compares nanocellulose with other natural and synthetic polymers, in contrast to earlier research, emphasizing the latter's inferior mechanical qualities, biocompatibility, and adaptability. In addition, we discuss recent developments in surface modification and extraction techniques that improve the performance of nanocellulose in high‐impact applications like medication administration, electronics, packaging, and environmental remediation. This analysis demonstrates the economic and sustainability potential of nanocellulose and suggests strategic options for future research by summarizing recent advances and identifying research gaps. Our study shows that turning cellulose into nanocellulose is valuable not just as a research project but also as a critical first step in creating long‐lasting materials to deal with the pressing issues of the twenty‐first century.