Bio-compatible, bio-degradable, and bio-available excipients are of critical interest for drug delivery systems. Cellulose and its derivative-based excipients have been well studied due to their green/natural and unique encapsulation/binding properties. They are often used in controlled/sustained drug delivery systems. In these applications, cellulose and its derivatives function generally can modify the solubility/gelling behavior of drugs, resulting in different mechanisms for controlling the release profiles of drugs. In this paper, the current knowledge in the structure and chemistry of conventional cellulose derivatives, and their applications in drug delivery systems are briefly reviewed. The development of innovative cellulose-based materials, including micro-cellulose (MC) and nano-cellulose (NC) in the applications of sustained drug delivery, is also discussed.