Cellulose is the most abundant organic compound with the formula (C6H10O5)n. On our globe, approximately 1015 Kg/yr is synthesized and degraded and is found in plenty in nature in the form of cotton, hemp, jute, flax etc. A good percentage of wood also consists of cellulose. Waste management is one of the biggest problems faced by the human beings in industry as well as domestically. Garment and hosiery industries are having the abundant waste of the cotton rags, cuttings etc. during the manufacturing of garments. As cotton is having highest percentages (87 to 96 %) of cellulose, it can be used for manufacturing of value added products like microcrystalline cellulose (MCC). Microcrystalline cellulose (MCC) is very important product in pharmaceutical, food, cosmetic and other industries. It can be derived by number of processes like reactive extrusion process, enzyme mediated process, the steam explosion process and acid hydrolysis process etc. Out of these processes, the acid hydrolysis process is used in this study because it requires shorter reaction time than other processes. It can be made by a continuous process rather than a batch-type process and it uses limited amount of acid and produces small particles of microcrystalline cellulose. In this study, MCC was produced from cotton rags, produced in large quantities in garment and hosiery industries. It was characterized through various techniques like infrared spectroscopy (FTIR), Xray diffraction (XRD) and thermogravimetric analysis (TGA). The results obtained show that the prepared sample has similar crystallinity, lower particle size, good thermal stability and less residue content.