Ion exchange and sorption of charged molecules such as dyes, crosslinking agents, etc., by cotton cellulose very much depend on the charge on cellulose, which in turn is known to depend on the external pH of the medium. In order to understand the role of various fixed groups in cellulose in its polyelectrolyte behavior, the standard cellulose was deliberately oxidized with nitrogen dioxide and sodium periodate, and the sorption of formaldehyde and dimethylol dihydroxyethylene urea by these oxycelluloses as well as by alkali‐treated nitrogen dioxide–oxycellulose was investigated. The results obtained are interpreted in terms of polyampholyte behavior of oxycellulose. The nitrogen dioxide–oxycellulose is positively charged and is a polycation in acidic medium due to protonation of aldehyde groups while it is negatively charged and acts as a polyanion in slightly acidic to alkaline medium due to dissociation of carboxyl groups.