The work aims to reduce the crystallinity of cellulose by ball milling to prepare cellulose ultrafine powder and produce dialdehyde cellulose by oxidation of milled cellulose with sodium periodate, so as to improve the strength of paper with dialdehyde cellulose. Microcrystalline cellulose was milled by ball milling to prepare cellulose ultrafine powder. The cellulose ultrafine powder samples treated for different time were characterized by IR, NMR, XRD and SEM. Dialdehyde cellulose ultrafine powder was prepared through the selective oxidation of the ultrafine powder of microcrystalline cellulose by sodium periodate. The dialdehyde cellulose ultrafine powder was added to the pulp to study its effect on paper strength. After the microcrystalline cellulose was crushed by ball milling, the crystalline area of cellulose was destroyed which resulted in the crystallinity of cellulose. At the same time, the ultrafine powders of different sizes were formed. When the fraction mass of dialdehyde cellulose in paper was 0.8% and 1.0%, respectively, the dry and wet strength of the paper increased to the maximum. On the condition that the mass ratio of microcrystalline cellulose and sodium periodate oxidation was 1∶3, the wet tensile strength of paper was the best, which increased from 1.9 N.m/g to 2.32 N.m/g, increasing by 22.1%. After the ultrafine powders of microcrystalline cellulose are oxidized by sodium periodate, a large number of aldehyde groups are produced on the surface of the fiber, which forms a semi-acetal structure with the hydroxyl groups on the surface of the fiber in the process of paper making, thus improving the dry and wet strength of the paper.