Regenerated microfibrillated cellulose (R-MFC) fibers were prepared successfully by a combined dissolution and regeneration approach using phosphoric acid/ethanol treatment on jute cellulose. The prepared R-MFC fibers possessed high surface area (10.74 m2/g), good aspect ratio (L/D = 30), and excellent thermal stability (T max = 352 °C). In addition, the fibers exhibited 3.84 wt % of phosphate groups (PO4 2–) with a ζ-potential of −8.4 mV and low crystallinity index (CI) of 47.5%. These R-MFC fibers were in the cellulose II polymorph, confirmed by 13C CPMAS NMR and WAXD measurements, and they were effective to anchor the growth of ZnO nanocrystals. WAXD and TEM examinations on the imbedded ZnO nanocrystals indicated that they possessed the hexagonal wurtzite crystal structure and could assemble into a flower-like morphology in the R-MFC scaffold. A R-MFC composite containing 41 wt % of ZnO nanocrystals was found to be very efficient to remove arsenic (As­(V)) ions from water with the maximum capacity of 4,421 mg/g at neutral pH (7), based on the Langmuir isotherm analysis. The binding stability study between ZnO nanocrystals and R-MFC confirmed that the composite scaffold only had negligible release of ZnO at neutral pH, indicating the viability of this system for practical water purification applications. This is the first study on preparation of R-MFC from nonwood cellulose (jute), while most of the earlier studies were on microcrystalline wood-based cellulose.