Cellulose particles, their derivatives and composites have special environmentally benign features and are abundant in nature with their various applications. This review paper introduces the essential properties of several types of cellulose and their derivatives obtained from various source materials, and their use in electro-responsive electrorheological (ER) suspensions, which are smart fluid systems that are actively responsive under applied electric fields, while, at zero electric field, ER fluids retain a liquid-like state. Given the actively controllable characteristics of cellulose-based smart ER fluids under an applied electric field regarding their rheological and dielectric properties, they can potentially be applied for various industrial devices including dampers and haptic devices.