Ionic liquid (IL) has been an attractive candidate for various industrial applications, especially in cellulose processing industry. The concerns over hazards of conventional volatile organic solvents can be overcome by ILs due to their unique and �green� characteristics. However, the controversy over the usage of ILs in various fields remains on their toxicity toward living organisms and their environmental impact. This review intends to reveal the connection between sustainability of IL technology and the applications of IL in dissolution of lignocellulosic biomass as well as permeabilization of microalgae cells. The mechanism studies are comprehensively evaluated, and the molecular physicochemical aspects of ILs used in these cellulose-degrading processes are systematically presented. In addition, the techno-economic and sustainability analyses of these IL-based applications are compiled. The highlights in future prospect and challenges of adopting IL in these processes could align the future research effort to fill in the knowledge gaps. This review aims to deliver a different perspective on the consideration of �toxic� and �green� elements of IL used in biomass processing. © 2020