Lignocellulosic materials are potentially a relatively inexpensive and abundant feedstock for biofuel production. The key to unlocking lignocelluloses recalcitrance is in part, the development of an effective pretreatment process. A promising new pretreatment method for lignocellulosic materials is the use of ionic liquids (ILs). ILs are non-volatile solvents that exhibit unique solvating properties. In this review, the dissolution of cellulose and lignocellulose in various ionic liquids is described including key properties such as high hydrogen-bonding basicity, which increases the ability of the IL to dissolve cellulose. As a pretreatment in biofuel production, the review details aspects such as the regeneration of cellulose from ionic liquids, structural changes that arise in the regenerated cellulose and its effect on enzymatic hydrolysis, the potential for IL recycling and finally, exploiting ILs in an integrated bioprocess.