This paper reports a novel process of nanofiber formation in regenerated cellulose from cellulose acetate (CA) film by saponification and stretching. Saponification of CA film was performed using sodium methoxide in methanol solution. Regeneration of cellulose during the saponification of CA was verified by taking Fourier transformation infrared spectrum. Cross-sectional images of the saponified and stretched CA film revealed an aligned nanofiber structure. The Young’s modulus and ultimate strength were enhanced approximately 630% and 450%, respectively, which might be due to the formation of multiple hydrogen bonds after sodium methoxide treatment along with the nanofiber formation. Since the saponified CA films are transparent, biodegradable, and possess high mechanical strength, they can be used as a biomaterial.