Nanocellulose, an exceptional natural material acquired from cellulose, has received tremendous attention over the past decades. This is because of its unique physical characteristics, surface chemistry, functional properties, and biocompatibility. Cellulose nanocrystals (CNCs) and cellulose nanofibers (CNFs) are two major types of nanocellulose that have received key interest so far. Nanocellulose is commercially produced from wood-based sources. With the ongoing demand for nanocellulose, agricultural wastes and non-woody plants are getting much consideration as cost-efficient alternatives. Water hyacinth (WH) is an alternative source that has shown great prospects for CNC and CNF fabrication. Nanocellulose from WH is proposed for several interesting applications, such as wet-spun filaments, aerogels, packaging films, battery separators, and water filtration, showing promising results. Studies have shown the nanocellulose achieved from WH has a comparable diameter and crystallinity related to the nanocellulose derived from other agricultural wastes, but lower than nanocellulose extracted from wood. Studies were more inclined towards chemical treatments for CNC extraction and mechanical processes for CNF isolation. This review aims to emphasize identifying the true potential of WH as a nanocellulose resource by critical evaluation of the isolation processes, affecting factors on nanocellulose properties, and the foundation of future research for producing sustainable materials. It was perceived that a lot of possibilities remain unexplored as many advanced techniques are yet not well studied for WH nanocellulose extraction. Further, the advantage of being a low-lignin raw material was not properly captured by mapping the more sustainable procedures, which should be a future highlight of WH research.