Lyocell is a form of rayon which consists of regenerated cellulose fiber made from dissolving pulp (bleached wood pulp) using dry jet-wet spinning. It was developed beginning in 1972 by a team at the now defunct American Enka fibers facility at Enka, NC.ilament fibers are used in items that have a silkier appearance such as women’s clothing and men’s dress shirts. Lyocell can be blended with a variety of other fibers such as silk, cotton, rayon, polyester, linen, nylon, and wool. Lyocell is also used in conveyor belts, specialty papers, and medical dressings.