Nowadays, functional materials based on renewable bioresources and environmentally friendly processes have attracted increased attention of both the industrial and the scientific community. Cellulose, the structural material of all plants, is the most abundant natural and renewable polymer possessing some promising properties, such as mechanical robustness, hydrophilicity, biocompatibility, and biodegradability. This paper gives an overview of the current cellulose research directed towards an advanced understanding and application of this most important bioresource. Emphasis is placed on cellulose functionalization and its conversion into novel high-performance cellulose materials with tailored properties (such as fibers, films, membranes, composites, and biomedical materials). Various physical and chemical treatments (alkalis, oxidizing agents, acetylation, ultrasound treatment, plasma treatment, and many other single or combined methods) used for cellulose modification to adjust its properties for different purposes, have been concisely reviewed. Furthermore, the unique hierarchical architecture of natural cellulose consisting of nanoscale fibrils and crystallites allows the extraction of the nanocrystals, and micro- and nanofibrilated cellulose via mechanical and chemical methods or their combination. These nanocellulose materials offer great opportunities in the field of advanced and functional materials. Finally, a novel platform to prepare various cellulose-based materials through more efficient and environmentally friendly processes based on recently developed new and "green" solvents for cellulose has also been discussed.