Utilization of hierarchically aligned natural cellulosic structures has become a leading natural template scaffold for a diverse range of functional applications. This natural scaffold derived from wood by partial or full removal of lignin without altering or disturbing the hierarchically aligned cellulosic structure is known as delignified wood (DW). Over the past five years, various types of functional materials for diverse applications have been fabricated using DW. This review aims to highlight the significance of DW in functional material development by discussing the delignification impacts on the wood cell wall properties and review the different strategies used in functional materials fabrication. The first part of this review discusses the fundamental aspects of wood cell wall structure in relation to wood chemistry and lignin biosynthesis. The second part focuses on the different delignification methods used in partial and full lignin removal from wood cell walls and the fundamental properties (i.e., physical, mechanical, and chemical) of DW. The third part of this review discusses the strategies and the detailed current literature regarding the development of diverse functional materials based on DW. A greater understanding of DW provides the potential for further development of DW‐based functional materials for a diverse range of future applications.