Cellulosic fibers have garnered significant attention in both academic research and industry due to their appealing physicochemical properties, distinctive structural qualities, and wide-ranging applications. In the realm of wood adhesives, the utilization of cellulose has witnessed a substantial surge in the last decade. Cellulose is employed either as reinforcement in the manufacturing of various wood adhesives or as a binder for wood bonding, offering a sustainable and eco-friendly alternative to traditional adhesives. This surge in the utilization of cellulose-based wood adhesives has led to remarkable improvements in both mechanical and physical properties, contributing to enhanced wood composite materials. This review aims to provide insight into recent developments in the rapidly expanding field of cellulose-based wood adhesives, encompassing fundamental research to practical applications. The initial section offers an updated depiction of cellulose, encompassing its chemical structure, characteristics, classification, and chemical modifications, highlighting its versatility and suitability in adhesion science. The paper culminates with a comprehensive overview of its benchmarking, addressing economic and environmental aspects, and outlining prospects and future directions for sustainable wood adhesive technology. In summary, cellulose derivatives have become pivotal in enhancing wood adhesive properties while aligning with sustainability goals, making this review a valuable resource to navigate the evolving landscape of cellulose-based wood adhesives.