Ionic liquids (ILs) have been widely used in biomedical and pharmaceutical fields as solvents or permeation enhancers. Recently, more and more researchers focused on optimizing the physicochemical properties of active pharmaceutical ingredient (API) by ILs technology. Converting APIs into ILs (API-ILs) has shown great potential for drug delivery by eliminating polymorphism, tailoring solubility, improving thermal stability, increasing dissolution, controlling drug release, modulating the surfactant properties, enhancing permeability of APIs and modulating cytotoxicity on tumor cells. In addition, API-ILs are also used in various formulations as active ingredients, such as solutions, emulsions, even tablets or nanoparticles. This paper aims to review current status of API-ILs, including the rational and design, preparation and characterization, the improvement on the physicochemical characteristics of APIs, the compatibility of API-ILs with various formulations, and the future prospects of API-ILs in biomedical and pharmaceutical fields.