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Cellulose nanocrystals (CNCs), produced by the acid hydrolysis of wood, cotton or other cellulose-rich sources, constitute a renewable nanosized raw material with a broad range of envisaged uses: for example, in composites, cosmetics and medical devices. The intriguing ability of CNCs to self-organize into a chiral nematic (cholesteric) liquid crystal phase with a helical arrangement has attracted significant interest, resulting in much research effort, as this arrangement gives dried CNC films a photonic band gap. The films thus acquire attractive optical properties, creating possibilities for use in applications such as security papers and mirrorless lasing. In this critical review, we discuss the sensitive balance between glass formation and liquid crystal self-assembly that governs the formation of the desired helical structure. We show that several as yet unclarified observations—some constituting severe obstacles for applications of CNCs—may result from competition between the two phenomena. Moreover, by comparison with the corresponding self-assembly processes of other rod-like nanoparticles, for example, carbon nanotubes and fd virus particles, we outline how further liquid crystal ordering phenomena may be expected from CNCs if the suspension parameters can be better controlled. Alternative interpretations of some unexpected phenomena are provided, and topics for future research are identified, as are new potential application strategies. Cellulose, a renewable biopolymer used throughout history, in particular to make clothing and paper, has recently attracted the interest of materials scientists in its nanocrystalline form. These nanofibers — produced by the acid hydrolysis of for instance cotton or wood — show promise for use in composites, cosmetics and medical devices. A Sweden-South Korea-based team led by Jan Lagerwall and Lennart Bergström now review the self-assembly of cellulose nanocrystals into a “chiral nematic” liquid-crystalline phase, which exhibits long-range ordering and adopts a helical superstructure. They compare the behavior of nanocellulose to other rod-like nanoparticles, such as nanotubes, and discuss the competitive gelation that can occur, which yields a glassy — rather than liquid-crystalline — phase. Through its chiral nematic arrangement, nanocellulose is endowed with interesting mechanical and optical properties. Furthermore, its liquid-crystalline suspensions can be processed into thin films, whose development and potential applications are discussed. The chiral liquid crystalline self-organization of cellulose nanocrystals into helical arrangements, giving the resulting materials photonic crystal properties and enhanced mechanical behavior, are comprehensively summarized and compared with other rod-like nanoparticles, for example, carbon nanotubes and fd virus. The consequences of the sensitive balance between liquid crystal formation and glass/gel formation are discussed in detail, in particular regarding the development toward control of helix pitch and orientation. Important topics for future studies are identified and suggestions for novel applications are made.