Cellulose nanocrystals (CNCs) derived from the acid hydrolysis of cellulose, are renewable, biocompatible, and biodegradable. CNCs with well-defined hierarchical structures offer remarkable iridescence which is easily tunable and exhibit non-toxicity. In this review, the mechanism behind the formation of structural color has been elucidated to address the fundamental principles governing optical properties. A detailed overview of CNC suspension preparation, film fabrication techniques, and external interventions is provided to control the self-assembly of CNCs. We further aim to shed light on the interaction of CNCs with selective additives to improve the material performance and functionality. This paper also provides insights into the latest technological applications of CNC photonic materials in various fields such as smart sensors, biomedical devices, flexible displays and passive daytime-colored radiative coolers. Finally, the economic, regulatory, and technical barriers are addressed to up-scale this technology from academia to industry for unlocking the full potential of CNC-derived photonic materials. It is believed that highlighting potential developments in the field of CNC-derived photonic materials can act as roadmap to guide researchers for producing next-generation smart materials.