This invention discloses methods for producing modified cellulose, modified nanocellulose, modified nanocellulose functionalized with other functional species, and derivatives thereof. The present invention also provides cellulose, nanocellulose, and their derivatives that are safe to use inside an animal or human body and are biocompatible without costly purification. These cellulose or nanocellulose materials can be used in many different applications, including carrier for pharmaceutical active agents and other medical devices.