A method of producing a low-dust, fire retardant cellulose fiber material useful in producing insulation and other such products is provided. A liquid, comprising a solvent and at least one fire-retarding material soluble in that solvent, is applied to a cellulose source material, and the liquid is allowed to permeate into the cellulose source material. The liquid permeated material is dried to remove the solvent while the fire-retardant material remains in the cellulose source material. The dried fire-retardant cellulose source material is reduced in size and then de-dusted to produce a low to no dust, fire-retardant cellulose fiber material that has functionally equivalent fire-retardant properties as the dried fire-retardant cellulose source material before de-dusting.