Increasing interest in bacterial cellulose due to the huge potential which exists for the development of this new biomaterial for medical applications has been met with recent growth in research in engineering this unique microbial manufactured material. The mechanical properties, porosity, and biocompatibility of bacterial cellulose derived biomaterials are particularly attractive for use in wound healing, tissue engineering, and drug delivery applications. Advances in synthetic biology and soft materials engineering are pushing the value of this biomaterial to new levels. This review provides and in-depth discussion of these most recent approaches in processing as well as physical, chemical, and genetic modification of bacterial cellulose toward further improvement and expansion of its functionality. In addition, we provide specific attention to the marketed applications of the resulting engineered materials for medical research and conclude with prospective areas of consideration for expanding the clinical utility of this biomaterial to new directions.