Nanocellulose is increasingly important due to its abundance and sustainability sources, outstanding physicochemical properties, low density, high specific surface area, and easily modified surface chemistry. Nanocellulose is obtained from various sources, such as plants, algae, and bacteria, with plant-derived nanocellulose being the most common. Their presence significantly benefits many applications, especially in developing advanced materials for high end-use. Despite these benefits, the intrinsic hydrophilic behavior complicates dispersion in hydrophobic polymer matrices due to aggregation issues that result in deterioration properties. Nanocellulose modification and surface tuning are identified as fundamental approaches for improving the compatibility of the interfacial interaction between nanocellulose and polymer matrix to impart new functionalities to novel advanced materials. This article offers insight into nanocellulose by highlighting various lignocellulosic biomass sources and their chemical constituents. Three categories of nanocellulose are discussed in this review, including cellulose nanocrystals, cellulose nanofibrils, and bacterial nanocellulose. This article also featured several methods for promoting surface modification of nanocellulose to overcome the compatibility barrier between nanocellulose and polymer matrix to achieve a balanced hydrophilic-hydrophobic behavior. A few recent and emerging applications of nanocellulose-based composites are also presented in this review.