Bacterial cellulose, an exopolysaccharide produced by some bacteria, has unique structural and mechanical properties and is highly pure as compared to plant cellulose. This article presents a critical review of the available information on the bacterial cellulose with special emphasis on its fermentative production and applications. Information on the biosynthetic pathway of bacterial cellulose, enzymes and precursors involved in bacterial cellulose synthesis has been specified. Characteristics of bacterial cellulose with respect to its structure and physicochemical properties are discussed. Current and potential applications of bacterial cellulose in food, pharmaceutical and other industries are also presented.