Cellulose, the most abundant biopolymer in nature, is derived from various sources. The production of pharmaceutical textiles based on cellulose represents a growing sector. In medicated textiles, textile and pharmaceutical sciences are integrated to develop new healthcare approaches aiming to improve patient compliance. Through the possibility of cellulose functionalization, pharmaceutical textiles can broaden the applications of cellulose in the biomedical field. This narrative review aims to illustrate both the methods of extraction and preparation of cellulose fibers, with a particular focus on nanocellulose, and diverse pharmaceutical applications like tissue restoration and antimicrobial, antiviral, and wound healing applications. Additionally, the merging between fabricated cellulosic textiles with drugs, metal nanoparticles, and plant-derived and synthetic materials are also illustrated. Moreover, new emerging technologies and the use of smart medicated textiles (3D and 4D cellulosic textiles) are not far from those within the review scope. In each section, the review outlines some of the limitations in the use of cellulose textiles, indicating scientific research that provides significant contributions to overcome them. This review also points out the faced challenges and possible solutions in a trial to present an overview on all issues related to the use of cellulose for the production of pharmaceutical textiles.