All Goodyear had done with vulcanization was improve the properties of a natural polymer. The next logical step was to use a natural polymer, cellulose, as the basis for a new material.

Inventors were particularly interested in developing synthetic substitutes for natural materials that were expensive and in short supply, since that meant a profitable market to exploit. Ivory was a particularly attractive target for a synthetic replacement. An Englishman named Alexander Parkes developed a "synthetic ivory" named "pyroxlin", which he marketed under the trade name "Parkesine", and which won a bronze medal at the 1862 World's Fair in London. Parkesine was made from cellulose treated with nitric acid and a solvent. The output of the process hardened into a hard, ivory-like material that could be molded when heated.

However, Parkes was not able to scale up the process to an industrial level, and products made from Parkesine quickly warped and cracked after a short time. An American printer and amateur inventor named John Wesley Hyatt took up where Parkes left off. Parkes had failed for lack of a proper solvent, but Hyatt discovered that camphor would do the job nicely.

Hyatt was something of an industrial genius who understood what could be done with such a shapeable, or "plastic", material, and proceeded to design much of the basic industrial machinery needed to produce quality plastic materials in quantity. Since cellulose was the main constituent used in the synthesis of his new material, Hyatt named it "celluloid". It was introduced in 1863.

One of the first products were dental pieces. Sets of false teeth built around celluloid proved cheaper than existing rubber dentures. However, celluloid dentures tended to soften when hot, making tea drinking tricky, and the camphor taste proved to be hard to eliminate. Celluloid's real breakthrough products were waterproof shirt collars, cuffs, and the false shirt fronts known as "dickies", whose willingness to pop up unpredictably became a stock joke in silent-movie comedies. Such celluloid items didn't wilt and didn't stain easily, and Hyatt sold them by trainloads. Corsets made with celluloid stays also proved popular, since perspiration didn't rust celluloid stays as it did metal stays.

Celluloid proved extremely versatile in its field of application, providing a cheap and attractive replacement for ivory, tortoise-shell, and bone. Not only was celluloid cheaper in itself, but products that had been made with such traditional materials could now be molded in large batches, instead of produced by expensive hand craftsmanship. Some of the 19th-century items made with cellulose were beautifully designed and made. For example, celluloid combs made to tie up the long tresses of hair fashionable at the time are now jewel-like museum pieces. Such pretty trinkets were no longer only for the rich.

Celluloid could also be used in entirely new applications. Hyatt figured out how to fabricate the material in a strip format for movie film. By the year 1900, movie film was a major market for celluloid. However, celluloid still tended to yellow and crack over time, and it had another, more dangerous defect: it burned very easily and spectacularly, unsurprising given that mixtures of nitric acid and cellulose are also used to synthesize smokeless powder.

Ping-pong balls, one of the few products still made with celluloid, sizzle and burn if set on fire, and Hyatt liked to tell stories about celluloid billiard balls exploding when struck very hard. These stories might have had a basis in fact, since the billiard balls were often made of celluloid and covered with paints based on another, even more flammable, nitrocellulose product known as "collodion". The paints might have acted as primer to set the rest of the ball off with a bang.

Cellulose was also used to produce cloth. While the men who developed celluloid were interested in replacing ivory, those who developed the new fibers were interested in replacing another expensive material, silk. In 1884, a French chemist, the Comte de Chardonnay, introduced a cellulose-based fabric that became known as "Chardonnay silk". It was an attractive cloth, but like celluloid it was very flammable, a property completely unacceptable in clothing. After some ghastly accidents, Chardonnay silk was taken off the market.

In 1894, three British inventors, Charles Cross, Edward Bevan, and Clayton Beadle, patented a new "artificial silk" or "art silk" that was much safer. The three men sold the rights for the new fabric to the French Courtald company, a major silk manufacturer, who put it into production in 1905, using cellulose from wood pulp as the "feedstock" material.

Art silk became well known under the trade name "rayon", and was produced in great quantities through the 1930s, when it was supplanted by better artificial fabrics. It still remains in production today, often in blends with other natural and artificial fibers. It is cheap and feels smooth on the skin, though it is weak when wet and creases easily. It could also be produced in a transparent sheet form known as "cellophane".