To replace petroleum-derived polymers with cellulose fibres, it is desirable to have the option of melt processing. However, upon heating, cellulose degradation typically starts before the material reaches its softening temperature. Alternatives to plastics should also, ideally, be recyclable via existing recycling streams. Here, we address the problem of melt processing cellulose as fibres while preserving recyclability. Native cellulose fibres were partially modified to dialcohol cellulose to impart thermoplastic characteristics. We demonstrate melt processing of these modified fibres with only water as plasticiser. Processability was investigated at selected processing temperatures and initial moisture content by monitoring the axial force of the extruder screws as a rheological indicator. The effects on molecular structure, fibre morphology and material properties were characterised by NMR spectroscopy, microscopy, tensile testing, fibre morphology analysis and X-ray diffraction. When comparing the melt-processed extrudate with handsheets, the already exceptional ductility was further increased. Moderate losses in tensile strength and stiffness were observed and are attributable to a loss of crystallinity and fibre shortening. This is the first report of strong and durable extrudates using cellulosic fibres as the only feedstock. Finally, the potential for recycling the processed material with unmodified fibres by paper recycling procedures was demonstrated.