In recent decades, the production of nanocellulose has gained significant attention. Nanocellulose-based film materials have found widespread applications in various high-end sectors owing to their remarkable characteristics. Nevertheless, the limitation of certain functional properties, such as resistance to water and fire, has posed challenges to their broader utilization. In this study, we conducted a comparative investigation on the impact of two distinct chemical modifications, namely, TEMPO-mediated oxidation and phosphorylation, on the production of nanocellulose sheets via a papermaking-assisted process. This approach explores the synergistic effects of these modifications in enhancing the properties of cellulose nanofibers for nanopaper production. To achieve this, we proposed utilizing Henna stems as an alternative source of cellulosic material, aiming to harness untapped agricultural residues as a sustainable alternative to conventional sources such as wood and cotton. The phosphorylated Henna nanopaper exhibited substantial enhancements in terms of mechanical properties, wettability, fire resistance, and water vapor permeability when compared to the TEMPO-modified Henna nanopaper. In conclusion, our findings underscore the potential of Henna stems as an environmentally sustainable source of cellulose for nanofiber production, positioning it as a promising alternative to wood and other lignocellulosic sources for advanced applications.