Ionic liquids (ILs) have been extensively used in drug formulation and delivery as designer solvents and other components because of their inherent tunability and useful physicochemical and biopharmaceutical properties. ILs can be used to manage some of the operational and functional challenges of drug delivery, including drug solubility, permeability, formulation instability, and in vivo systemic toxicity, that are associated with conventional organic solvents/agents. Furthermore, ILs have been recognized as potential solvents to address the polymorphism, limited solubility, poor permeability, instability, and low bioavailability of crystalline drugs. In this account, we discuss the technological progress and strategies toward designing biocompatible ILs and explore potential biomedical applications, namely the solubilization of small and macromolecular drugs, the creation of active pharmaceutical ingredients, and the delivery of pharmaceuticals.