The entropic driving forces of cellulose dissolution in water and in the ionic liquid 1-butyl-3-methylimidazolium chloride (BmimCl) are investigated via molecular dynamics simulations and the two-phase thermodynamic model. An atomistic model of cellulose was simulated at a dissociated state and a microfibril state to represent dissolution. The calculated values of entropy and internal energy changes between the two states inform the interplay of energetic and entropic driving forces in cellulose dissolution. In both water and BmimCl, we found that the entropy associated with the solvent degrees of freedom (DOF) decreases upon cellulose dissolution. However, solvent entropy reduction in BmimCl is much smaller than that in water and counteracts the entropy gain from the solute DOF to a much lesser extent. Solvent entropy reduction in water also plays a major role in making the free energy change of cellulose dissolution unfavorable at room temperature. In BmimCl, the interaction energies between solvent molecules and glucan chains and the total entropy change both contribute favorably to the dissolution free energy of cellulose. Calculations at different temperatures in the two solvents indicate that changes in total internal energy are a good indicator of the sign of the free energy change of cellulose dissolution.