In recent years, hydrogel-based research in biomedical engineering has attracted more attention. Cellulose-based hydrogels have become a research hotspot in the field of functional materials because of their outstanding characteristics such as excellent flexibility, stimulus-response, biocompatibility, and degradability. In addition, cellulose-based hydrogel materials exhibit excellent mechanical properties and designable functions through different preparation methods and structure designs, demonstrating huge development potential. In this review, we have systematically summarized sources and types of cellulose and the formation mechanism of the hydrogel. We have reviewed and discussed the recent progress in the development of cellulose-based hydrogels and introduced their applications such as ionic conduction, thermal insulation, and drug delivery. Also, we analyzed and highlighted the trends and opportunities for the further development of cellulose-based hydrogels as emerging materials in the future.