Cellulose is generally 80% newspaper (up to100% post-consumer recycled) and 20% binders and fire-retardants, commonly borax, boric acid, sulfuric acid, ammonium sulfates and/or other chemical compounds.

Cellulose offers many advantages including a high recycled material content, good acoustical insulation qualities and low cost. Cellulose is rated R21 to R26 and costs about 20¢ to 30¢ per sq.ft. It is available in dry loose fill for blown-in application or for wet-spray applications.
Cellulose insulation is usually blown into wall cavities from the exterior by drilling small holes that are filled later. Although generally thought to be a safe and ecological product, breathing loose-fill cellulose dust can cause respiratory problems and health risks from inhalation of paper dust and off-gassing chemicals, such as the inks from the recycled newsprint, insecticides, fungicides, fire retardants and solvents used in the recycling process. However, proper and careful installation can prevent contact with this product thereby avoiding these issues. Proper installation includes preventing cellulose from entering any duct work or HVAC systems and making sure air circulating systems are not in operation during installation. Proper protective clothing, mask and eyewear are also recommended during installation.
Although treated with fire retardant, cellulose is not necessarily fire proof and it could burn if exposed to a heat source. If moisture is present, the borate fire retarder can leach out and become a less effective fire retardant.
Loose fill insulations can settle over time, reducing their insulating effectiveness. Some manufacturers have offered stabilized cellulose to prevent settling.
Cellulose insulation could be an absorbant for VOCs. Use of an impermeable membrane, called vapor barriers could assist in resolving this problem. The borate compound is commonly the only additive for fire resistance. Many other products use aluminum sulfate for fire protection. If moisture is present, aluminum sulfate can corrode steel or copper (such as in fasteners or plumbing) that might come in contact with the insulation. Borate is non-corrosive. Moisture reduces R-value and could cause mold related issues.