Lyocell is a form of rayon which consists of cellulose fiber made from dissolving pulp using dry jet-wet spinning. TENCEL® is the Austrian brand for a type of lyocell. Advisory - the transformation of lyocell fibers into fabric and garments can use many or the same harsh, and even toxic, chemicals and processes used in conventional garments. This is because of lyocell: doesn’t always accept dyes well, and it has an inherent tendency to pill.