Cellulose is an excellent candidate for the fabrication of sustainable materials owing to its good availability, renewability, biodegradability and biocompatibility. Chemical modification is an appealing way to broaden the utilization of cellulose. However, the poor solubility of cellulose in water and common organic solvents restricts chemical modification of cellulose to heterogeneous conditions or in a few limited specific systems. In recent years, advances have been made in more efficient and greener solvents for cellulose. Some of them have greatly changed the chemical modification of cellulose, and their influence on the future cellulose industry is anticipated. In this review, novel “green” solvents for cellulose dissolution, including ionic liquids (ILs), deep eutectic solvents (DESs), aqueous alkali/urea solutions and aqueous quaternary onium hydroxides (QOHs) are introduced. Recent advancements in chemical modification of cellulose in these solvents, especially those made in the past five years, are highlighted and discussed.