Cellulose is the most abundant polymer and a very important renewable resource. Since cellulose cannot be shaped by melting, a major route for its use for novel materials, new chemical compounds and renewable energy must go via the solution state. Investigations during several decades have led to the identification of several solvents of notably different character. The mechanisms of dissolution in terms of intermolecular interactions have been discussed from early work but, even on fundamental aspects, conflicting and opposite views appear. In view of this, strategies for developing new solvent systems for various applications have remained obscure. There is for example a strong need for using forest products for higher value materials and for environmental and cost reasons to use water-based solvents. Several new water-based solvents have been developed recently but there is no consensus regarding the underlying mechanisms. Here we wish to address the most important mechanisms described in the literature and confront them with experimental observations. A broadened view is helpful for improving the current picture and thus cellulose derivatives and phenomena such as fiber dissolution, swelling, regeneration, plasticization and dispersion are considered. In addition to the matter of hydrogen bonding versus hydrophobic interactions, the role of ionization as well as some applications of new knowledge gained are highlighted.