Aqueous solutions of many cellulose ethers are known to undergo thermoreversible gelation and phase separation upon heating to form turbid hydrogels, but the mechanism and resulting structures have not been well understood. Optical turbidity, rheology, light scattering and small-angle neutron scattering (SANS) are used to show that hydroxypropyl methylcellulose (HPMC) chains are dissolved in water below 50 °C and undergo phase separation at higher temperatures via a spinodal decomposition mechanism. At 70 °C, at sufficiently high concentrations in water, HPMC orders into fibrillar structures with a well-defined radius of 18 ± 2 nm, as characterized by cryogenic transmission electron microscopy and SANS. The HPMC fibril structure is independent of concentration and heating rate. However, HPMC fibrils do not form a percolating network as readily as is seen in methylcellulose, resulting in a lower hot-gel modulus, as demonstrated by rheology. The chemical substitution pattern along the cellulose backbone was found to affect fibril length, flexibility and fibrillation temperature.