Bacterial cellulose (BC), also termed bio-cellulose, has been recognized as a biomaterial of vital importance, thanks to its impressive structural features, diverse synthesis routes, high thermomechanical properties, and its ability to combine with multiple additives to form composites for a wide range of applications in diversified areas. Its purity, nontoxicity, and better physico-mechanical features than plant cellulose (PC) make it a better choice for biological applications. However, a major issue with the use of BC instead of PC for various applications is its high production costs, mainly caused by the use of expensive components in the chemically defined media, such as Hestrin–Schramm (HS) medium. Furthermore, the low yield of BC-producing bacteria indirectly accounts for the high cost of BC-based products. Over the last couple of decades, extensive efforts have been devoted to the exploration of low-cost carbon sources for BC production, besides identifying efficient bacterial strains as well as developing engineered strains, developing advanced reactors, and optimizing the culturing conditions for the high yield and productivity of BC, with the aim to minimize its production cost. Considering the applications, BC has attracted attention in highly diversified areas, such as medical, pharmaceutics, textile, cosmetics, food, environmental, and industrial sectors. This review is focused on overviewing the cost-effective synthesis routes for BC production, along with its noteworthy applications in the food and environmental sectors. We have made a comprehensive review of recent papers regarding the cost-effective production and applications of BC in the food and environmental sectors. This review provides the basic knowledge and understanding for cost-effective and scaleup of BC production by discussing the techno-economic analysis of BC production, BC market, and commercialization of BC products. It explores BC applications as food additives as its functionalization to minimize different environmental hazards, such as air contaminants and water pollutants.