Ionic liquid (IL) microemulsion is a thermodynamically stable, isotropic, optically transparent solution consisting of hydrophilic, lipophilic, and amphiphilic components; at least one of them is an IL. Depending on the characteristics of their chemical structure, the IL can substitute water, oil, and surfactant in typical W/O/S microemulsions. In this chapter, we discuss the results of studies wherein IL substitutes the oil component resulting in water‐in‐IL microemulsion as well as IL substitutes the polar or water component resulting in IL‐in‐oil microemulsion and their potential applications. The morphology, property, and microstructure of such microemulsions along with their applications are summarized and discussed. The article focuses on IL microemulsion phase equilibria and critical phenomena, their possible chemical reaction media, and drug carrier properties. It is suggested that applying the combination of green properties of ILs with their unique tailor‐made physicochemical properties, biocompatible ILs can be formed projecting the uses of ILs as pharmaceutical solvents, alternative media for reactions, and functional solvents for nanoparticle synthesis, extraction, and separation.