Cellulose is the most abundant biomass material in the world. Magnetic nanoparticles can be used as reinforcing materials to give cellulose more functions due to their unique magnetism. According to the dispersion stability of nanocellulose, magnetic nanocellulose is divided into homogeneous preparation and heterogeneous preparation. In addition, the directional arrangement of nanocellulose by external magnetic field is also a way of cellulose functionalization. The current preparation of magnetic nanocellulose is mainly based on heterogeneous preparation. Magnetic nanofiber cellulose has great application potential in the field of biomedicine and sewage purification due to its special magnetic properties. It can also be applied to sensors, food packaging and other fields. In this paper, the preparation methods of magnetic nanocellulose and its physical magnetism are introduced. Then, the application of magnetic nanocellulose in different fields is reviewed. Finally, the current challenges of magnetic nanocellulose are summarized and the future development trend is prospected.