Reinforcing, surface-functionalized cellulose nanocrystals (CNCs) with photoactive groups were obtained from wood cellulose fibers using sequential periodate oxidation and a “click-type” reaction between aldehyde groups and p-aminobenzoic acid in an aqueous environment, followed by mechanical disintegration. In the solution state, CNCs exhibited very high UV-absorption properties, especially in UVA and UVB regions (100% absorption was achieved with only 0.1% of CNCs) and high transparency in the visible light region (around 90% with 0.1% of CNCs). The fabricated CNCs functioned as lightweight-reinforcing fillers with high UV-absorption capability when incorporated into a poly(vinyl alcohol) (PVA) matrix. Complete UVA and UVB opacity of the nanocomposite was achieved using 10% of CNCs while simultaneously retaining over 80% transparency over the whole visible light spectrum. In addition, up to 33% and 77% higher tensile strength and modulus, respectively, were achieved using 10% of CNCs compared to pristine PVA. This result presented a unique way to produce multifunctional CNCs to be incorporated into nanocomposite structures instead of metal nanoparticles. These CNCs are supposed to be suitable for many applications requiring high visible light transparency and blocking of UV radiation.