In this study, nonspinnable short staple cotton fibers were microfibrillated in disc refiner followed by nanofibrillation in high pressure homogenizer and their properties evaluated. The extent of fibrillation was improved by increased number of repeated passes. Refining as a pretreatment process helps to circumvent the fiber clogging problem in homogenizer nozzle. Microfibrillation by 30 passes in refining produced the fibrils of size 416 ± 177 nm and subsequent nanofibrillation by 15 passes in homogenization resulted in 112 ± 49 nm as revealed by scanning electron microscopy. While refining process does not significantly affect the crystalline index of fibers, homogenization reduced it by 10% due to very high shear and impact forces and hydrodynamic cavitation. The degree of polymerization of cotton fibers was reduced significantly (35.4%) during this two-stage process. Fourier transform infrared spectroscopy proved that there is no change in the molecular structure of cotton fibrils during this two-stage fibrillation process. Thus produced nanofibrils having potential application as fillers in composites which can be used for various application food packaging, much films membranes etc. add value to the cotton fibers that are not suitable for spinning in textile industries due to their very short length. POLYM. ENG. SCI., 2013. © 2012 Society of Plastics Engineers