The use of biopolymers in controlled drug delivery has attracted significant attention due to their properties such as, biocompatibility, biodegradability and non-toxicity. Among these, cellulose is one of the most attractive natural polymers, which can be found either in plants (cell wall or various organs) or can be produced by bacteria or animals. This chapter provides a comprehensive overview of cellulose-based hydrogels and their potential in controlled drug delivery. From the beginning, the role of hydrogels in improving the efficacy and safety of drug delivery is briefly presented. Their unique properties that make them ideal carriers for controlled drug release, like porosity, swelling behavior, mechanical properties, and responsiveness to environmental stimuli, are highlighted. The mechanisms underlying the drug release processes are also discussed. The latest and most important developments in cellulose-based hydrogels, the integration of nanocellulose into the hydrogels’ matrix, as well as the preparation of stimuli-responsive hydrogels and composite/hybrid hydrogels are discussed in detail. All these systems are presented in close connection with their successful application in different drug delivery routes (oral, ocular, nasal, dermal and transdermal). The chapter concludes by addressing some limitations (i.e., the limited loading capacity of hydrophobic drugs and the need for increased control over release kinetics) and mentioning some future research directions (i.e., more eco-friendly synthesis methods and advanced formulations).