Reinforcement of PEEK by nanoparticles such as multiwalled carbon nanotubes (MWCNTs), is a promising technique to prepare PEEK nanocomposites with improved properties for promising biomedical applications. However, proper dispersion of MWCNTs in the polymer matrices is a primary processing challenge. The present study reports a novel and environmentally beneficial approach for homogeneous dispersion of MWCNT in PEEK by using ionic liquid (IL) 1-ethyl-3-methylimidazolium hydrogen sulfate (EMIMHSO4). Neat PEEK, PEEK-MWCNTs (using conventional organic solvent dimethylformamide), and PEEK-MWCNTs-IL (using EMIMHSO4) nanocomposites were fabricated via melt-compounding and compression molding techniques. The fabricated composites were characterized for morphological, thermal, and mechanical properties and compared to those of neat PEEK and PEEK-MWCNTs. Ionic liquid provoked proficient dispersion of the MWCNTs in PEEK, as confirmed by FESEM and optical micrographs. The thermal stability of PEEK-MWCNTs-IL composite was significantly superior to that of the neat PEEK and PEEK-MWCNTs. Analysis of tensile strength and nanoindentation depicted that the modulus of elasticity of PEEK-MWNCTs-IL was significantly increased by 76% as compared to that of neat PEEK. We believe that the present work could provide a new and green platform for the manufacturing of PEEK nanocomposites with enhanced dispersion of nanofillers for biomedical applications. © 2020 Wiley Periodicals LLC.