Cellulose nanowhiskers (CNWs) are used to reinforce an all-cellulose composite. This composite comprises a matrix formed by dissolution of plant cellulose using a lithium chloride/N,N-dimethylacetamide solvent system into which high stiffness CNWs are dispersed. It is shown that the Young's modulus and strength of the composites decrease dramatically when the material is wetted. Raman spectroscopy is used to show how the two bands located at 1095 and 895 cm -1 can be used to follow both the molecular deformation and orientation of the CNWs and the matrix phases, respectively, both in the wet and dry states. The disruption of the stress transfer process is observable via the lack of shift in the position of both Raman peaks upon deformation in the wet state. This shift is restored when the samples are dried, and some recovery is noted in the materials. The orientation of both the matrix and CNWs phases is monitored during stretching, both in wet and dry states. Little orientation of the CNWs is observed at low strains. Significant orientation of the CNWs occurs at high strain, for samples deformed both in the wet and dry states. The most significant orientation is observed for cellulose molecular chains present in the matrix phase. It is thought that this component of the orientation contributes significantly to the mechanical properties of the nanocomposites. The use of these approaches opens up opportunities to use wet processing to induce orientation of cellulose nanofibers, and to monitor the development of mechanical properties using Raman spectroscopy in a wet environment. © 2013 Springer Science+Business Media New York.