For the first time, collagen-based hydrogels were fabricated in the presence of a biocompatible ionic liquid, 1-ethyl-3-methylimidazolium acetate ([EMIM] [Ac]), by a simple biopolymer cross-linking process facilitated by the strong catalytic hydrolysis of microbial transglutaminase (MTGase). Phosphate buffer solution (PBS)-encapsulated human-like collagen (HLC) or fish bone collagen (FBC) for the composite hydrogels was simply prepared by the codissolution of biopolymers in [EMIM] [Ac] or, in the absence of the ionic liquid, by the dispersion of MTGase in the biopolymer solution, leading to the formation of MTGase-aided hydrogels (Gel1 and Gel4) and [EMIM] [Ac]/MTGase-aided hydrogels (Gel2, Gel3, and Gel5). The effects of different contents of [EMIM] [Ac] and collagens of different origins (HLC and FBC) during fabrication on a range of structural and material characteristics, including the synthesis mechanism, three-dimensional structure, swelling behavior, mechanical strength, enzymatic hydrolysis rate, cytotoxicity, fibroblast cell proliferation rate, inhibition of cancer cells and cell adhesion, and histocompatibility, were investigated. Surprisingly, fabrication with [EMIM] [Ac] had significant effects on the structure and properties of the collagen/MTGase-based hydrogels. In other words, [EMIM] [Ac] changed the underlying mechanism responsible for the advantageous properties of the hydrogels by changing the three-dimensional structure of HLC or FBC, which improved their effects on fibroblast proliferation (3T3-L1 and L929 cells) and their inhibition of cancer cells (HepG2 and MKN45 cells). The use of the ionic liquid also imbued the hydrogels with degradation resistance and anti-inflammatory properties after subcutaneous injection into mice (). The catalytic hydrolysis by MTGase and the [EMIM] [Ac] content were the major factors that influenced the properties of the collagen. This result suggests the potential application of ionic liquid-enzymatic hydrolysis in the fabrication of collagen hydrogels in circumstances where the control of the properties by an ionic liquid is desirable. Therefore, [EMIM] [Ac] could be a promising solvent for the development of collagen into smart biomaterials with controlled biodegradation rates that can meet the needs of specific potential applications, such as tissue engineering and cancer therapy.