Brands and retailers are under immense pressure to provide textile and apparel products which are environmentally sustainable. At the same time, there is an urgent need to reduce the amount of waste generated by the global fashion industry—which is estimated at 92 mn tons per annum. These key challenges could be addressed by making cellulosic fibres from materials derived from textile waste. These fibres are biodegradable and are therefore considered to be more environmentally sustainable than synthetic fibres. Also, textiles and clothing made from these fibres can themselves be used as feedstocks in recycling processes at the ends of their useful lives, thereby contributing towards the development of a circular economy. Some start-up companies have been quick to recognise the huge commercial potential for cellulosic fibres derived from textile waste and made rapid progress in developing innovative technologies in this area. Other companies have developed ways of making unique cellulosic fibres from materials recovered from textile waste. This report highlights the potential for commercialising cellulosic fibres derived from textile waste, and includes profiles of six start-up companies innovating in this sector, namely Circ, Evrnu, Infinited Fiber Company, Renewcell, Spinnova and Worn Again Technologies. Also, it describes a number of projects supporting the development of cellulosic fibres derived from post-consumer waste and provides an outlook for the future.