Global dependence on petroleum-based plastics has elevated environmental impact and health issues owing to their accumulation in various ecosystems, non-biodegradability, and the release of toxic by-products. This chapter explores the feasibility of utilizing cellulose and its derivatives as sustainable and eco-friendly alternatives for packaging and other applications that align with the principles of circular economy and sustainability goals. The environmental hazards of conventional plastics and their impact on marine ecosystems, agriculture, food safety, and human health are explored to necessitate the need for sustainable alternatives. Investigations on cellulose-based film, highlighting their manufacturing techniques—including solvent casting, extrusion blow molding, layer-by-layer assembly, and electrospinning have been documented along with their tailored properties, limitations, and functional advantages. Life-cycle assessment of cellulose-based films emphasizes the need for process optimization and the utilization of compatible renewable resources that are cost-effective. It evaluates the ecological impact of each step of the production process to attain sustainability. The limitations in employing cellulose-based film encounters technological constraints in retaining hydrophobicity, mechanical stability, production costs, and scalability. These issues are addressed by considering the future perspective of replacing petroleum-based plastics through chemical modification and nano structuring for greener solutions. This chapter concludes that cellulose-based films present a promising pathway to reduce plastic pollution and its jeopardizing impact on the environment by promoting the utilization of sustainable materials that support global well-being.