<p>Cellulose nanocrystals (CNCs) have garnered significant attention as biodegradable and renewable nano-material, owing to their unique structural and mechanical attributes, such as high stiffness and large surface area. This comprehensive review presents recent advancements in the production of CNCs, with specific focus on their characteristics, production techniques, and potential as eco-friendly additive in various aspects of food processing. Various preparation techniques, including acid hydrolysis, enzymatic hydrolysis, and mechanical fragmentation, offer distinct advantages in terms of yield and purity. Subcritical water hydrolysis and natural deep eutectic solvent (NADES) have emerged as sustainable green approaches that are widely adopted for the development of functional nanocrystals. These nanocrystals can also be surface modified for development of high-performance nanocomposites using hydrophobic polymer matrices. The functional versatility of CNCs is further explored through their application in stabilizing essential oil and emulsions, production of thermally stable hydrogels, and enhancing the bioavailability and controlled release of active ingredients in oral nutraceutical formulations. In addition to these, incorporation of CNCs to packaging materials offers promising solution as a sustainable and biodegradable alternative to synthetic options, with enhanced mechanical and barrier properties. By identifying the challenges and summarizing the advancements, this review underscores the potential of CNCs as a sustainable nanotechnology platform, paving the way for future innovations in food technology, drug delivery, and smart packaging applications.</p>