When used as fillers in polymer composites, the thermostability of cellulose crystals is important. Sulfate groups, introduced during hydrolysis with sulfuric acid, are suspected to diminish the thermostability. To elucidate the relationship between the hydrolysis conditions, the number of sulfate groups introduced, and the thermal degradation behavior of cellulose crystals, bacterial cellulose was hydrolyzed with sulfuric acid under different hydrolysis conditions. The number of sulfate groups in the crystals was determined by potentiometric titration. The thermal degradation behavior was investigated by thermogravimetric analysis. The sulfate group content increased with acid concentration, acid-to-cellulose ratio, and hydrolysis time. Even at low levels, the sulfate groups caused a significant decrease in degradation temperatures and an increase in char fraction confirming that the sulfate groups act as flame retardants. Profile analysis of the derivative thermogravimetric curves indicated thermal separation of the degradation reactions by the sulfate groups into low- and high-temperature processes. The Broido method was used to determine activation energies for the degradation processes. The activation energies were lower at larger amounts of sulfate groups suggesting a catalytic effect on the degradation reactions. For high thermostability in the crystals, low acid concentrations, small acid-to-cellulose ratios, and short hydrolysis times should be used.