Lignocellulosic biomass is the most abundant renewable and inexpensive source that can be used to produce biofuels and bioproducts. One of the major limitations of biomass valorisation is its recalcitrance to an efficient conversion due to its lignin-carbohydrate complex structure. This limitation causes technical and economic challenges for the conversion of lignocellulosic biomass into value-added products. Certain ionic liquids (ILs) have been proven to be effective solvents to deconstruct lignocellulosic biomass. The concerns over hazards of conventional volatile organic solvents can be overcome by ILs due to their unique and ‘green’ characteristics. Advancements in ionic liquid pretreatment may help to increase the productivity of lignocellulosic-based bioconversion. This review describes, at first, the potential of the most prominent types of ionic liquids and the impact of the cation/anion combination on their physiochemical properties. It then discusses the different approaches, which are followed for the dissolution and fractionation of three major components of lignocellulosic biomass using ionic liquids and categorize them based on the target application. Additionally, the optimal process parameters for ionic liquid pretreatment toward optimisation of the dissolution yield are mentioned. It finally highlights the challenges of using ionic liquid during its commercial use in biomass pretreatment and processing, specially the synthesis cost as the economic barrier. It is hoped that the highlights in future prospect and challenges of adopting IL in these processes will stimulate a wide range of research studies and collaborations, leading to significant industrial progress in this area