Given its exceptional attributes, aerogel is viewed as a material with immense potential. Being a natural polymer, cellulose offers the advantage of being both replenishable and capable of breaking down naturally. Cellulose-derived aerogels encompass the replenish ability, biocompatible nature, and ability to degrade naturally inherent in cellulose, along with additional benefits like minimal weight, extensive porousness, and expansive specific surface area. Even with increasing appreciation and acceptance, the undiscovered possibilities of aerogels within the textile sphere continue to be predominantly uninvestigated. In this context, we outline the latest advancements in the study of cellulose aerogel formulation and their diverse impacts on textile formations. Drawing from the latest studies, we reviewed the materials used for the creation of various kinds of cellulose-focused aerogels and their properties, analytical techniques, and multiple functionalities in relation to textiles. This comprehensive analysis extensively covers the diverse strategies employed to enhance the multi-functionality of cellulose-based aerogels in the textile industry. Additionally, we focused on the global market size of bio-derivative aerogels, companies in the industry producing goods, and prospects moving forward.