Cellulose nanocrystals (CNCs) are widely used in advanced materials due to their unique mechanical and physicochemical properties. However, their interactions with water, particularly in the context of drying, remain poorly understood. The presence of bound water in CNC poses challenges for processing, storage, and applications sensitive to moisture. In this study, we combine molecular simulations and experimental drying investigations to assess the extent of water retention in both native and TEMPO-CNC under different thermodynamic conditions. Our results demonstrate that while native CNCs can be fully dried under low pressure (≤1 mbar) and elevated temperature (110 °C), TEMPO-CNC retain a significant amount of water (1–7 wt%) due to electrostatic interactions between water molecules and the charged surface carboxylic groups and the sodium counter-ions. These findings provide fundamental insights into the drying behavior of functionalized nanocellulose and highlight the importance of considering residual bound water in applications requiring moisture-sensitive performance.