A method of producing bleached microcrystalline cellulose which method comprises neutralizing or alkalizing an acidic microcrystalline production reaction mixture slurry, typically produced by acid hydrolysis or by electronic beam irradiation, followed by adding an oxidant to such reaction mixture. This practice of this method permits the production of microcrystalline cellulose having desirable color stability as well as compression characteristics suitable for pharmaceutical binder use from paper grade and other low purity pulps.