Cellulose fiber has been modified by mechanical and chemical means in order to improve paper properties, which respond to moisture and temperature. When the cellulose is first refined and then etherified using hydroxypropylation under dry conditions, the paper sheets prepared from the hydroxypropylated cellulose show improved elongation. When the level of hydroxypropylation is high enough, the paper sheets also become transparent. Additionally, the effect of cellulose activation using different mechanical methods has been compared by esterification reactions. It is shown that removal of water is the most crucial step for the esterification reactions while other methods have a lesser impact. The paper sheets prepared from the esterified cellulose fibers show an increase in contact angles and high hydrophobicity. (C) 2012 Elsevier Ltd. All rights reserved.