Growing concerns related to environmental pollution, energy security, and future oil supplies have encouraged the development of large-scale non-petroleum-based alternative fuels, such as bioethanol and biodiesel. Bioethanol made from inexpensive and abundant sources of lignocellulosic biomass, and biodiesel produced through the transesterification of vegetable oils or animal fats are highly desirable. To efficiently produce bioethanol and biodiesel from lignocellulosic biomass and vegetable oil, however, pretreatment and transesterification are generally required. These processes usually necessitate the use of environmentally harmful chemicals such as alkali, acidic, or organic solvents. Ionic liquids (ILs), due to their significant environmental benefits, process improvements, and uses as both solvents and catalysts, have attracted significant attention for their use in biofuel production. This paper reviews the applications and main factors affecting the use of ILs in the pretreatment, dissolution, and hydrolysis of lignocellulosic biomass, as well as the synthesis and energy-efficient recycling of ILs. A new process for biodiesel production, in which ILs act as the co-solvents, catalysts, or enzyme supports in the oil transesterification process, is also discussed. (C) 2011 Elsevier Ltd. All rights reserved.