Colloidal chiral nematic suspensions of cellulose were prepared from dissolving grade wood pulp. On evaporation of the water, the suspension dries down to give iridescent cellulose films. The optical properties of the films may be characterized by incorporating dyes in the films, and following the ordering of the dye molecules by measurement of induced circular dichroism (ICD). Structural changes to the films, such as decreasing the chiral nematic pitch by increasing the salt content and increasing the chiral nematic order through magnetic alignment, can be monitored by measuring the changes in ICD.