Cellulose hydrogels, formed either through physical or chemical cross-linking into a three-dimensional network from cellulose or its derivatives, are renowned for their exceptional water absorption capacities and biocompatibility. Rising demands for sustainable materials have spurred interest in cellulose hydrogels, attributed to their abundant supply, biodegradability, and non-toxic nature. These properties highlight their extensive potential across various sectors including biomedicine, the food industry, and environmental protection. Cellulose hydrogels are particularly advantageous in applications such as drug delivery, wound dressing, and water treatment. Recent large-scale studies have advanced our understanding of cellulose preparation and its applications. This review delves into the fundamental concepts, preparation techniques, and current applications of cellulose hydrogels in diverse fields. It also discusses the latest advances in nano-lignin-based hydrogels, providing a comprehensive overview of this promising material and offering insights and guidance for future research and development.