The growing environmental concerns due to the excessive use of non-renewable petroleum based products have raised interest for the sustainable synthesis of bio-based value added products and chemicals. Recently, nanocellulose has attracted wide attention because of its unique properties such as high surface area, tunable surface chemistry, excellent mechanical strength, biodegradability and renewable nature. It serves wide range of applications in paper making, biosensor, hydrogel and aerogel synthesis, water purification, biomedical industry and food industry. Variations in selection of source, processing technique and subsequent chemical modifications influence the size, morphology, and other characteristics of nanocellulose and ultimately their area of application. The current review is focused on extraction/synthesis of nanocellulose from different sources such as bacteria and lignocellulosic biomass, by using various production techniques ranging from traditional harsh chemicals to green methods. Further, the challenges in nanocellulose production, physio-chemical properties and applications are discussed with future opportunities. Finally, the sustainability of nanocellulose product as well as processes is reviewed by taking a systems view. The impact of chemicals, energy use, and waste generated can often negate the benefit of a bio-based product. These issues are evaluated and future research needs are identified.