Interaction between N-methylmorpholine N-oxide (NMMO), H2O, and the titanium dioxide (TiO2) surface was studied by spectral tests and molecular dynamics simulations as the theoretical foundation for the development of functional lyocell. The molecular structure, movement, and arrangement of the NMMO and water molecules, as well as the interaction energies between them, were characterized. The results show that both water and NMMO molecules can interact with the TiO2 surface, and the water molecule is stronger, which makes the water molecules near the TiO2 surface different from that of the bulk solution. With the increase of the NMMO concentration, NMMO molecules compete with the water molecules adsorbed on the TiO2 surface, and two adsorption conformations of NMMO on the TiO2 surface were found. When the NMMO concentration is higher than 50%, the N-O bond of NMMO is the main position interacting with the TiO2 surface, forming a more stable and complex adsorption molecular layer and enhancing the interaction between TiO2 and the solution, and finally promote the dispersion of TiO2 particle and increase the zero-shear viscosity of the lyocell solution. At the same time, the strong interaction also weakens the N-O bond of the NMMO molecules near the TiO2 surface with the bond length increasing; however, the influence cannot cause instability of NMMO. UV spectra also shows that there is no NMMO decomposition due to the addition of TiO2 during the dissolution process. In conclusion, NMMO can promote the dispersion of the TiO2 nanoparticles in the solvent, and the stability of NMMO is not affected, which is the basis for the preparation of the functional lyocell fiber.