Ionic liquids (ILs) have been proven to be an effective technology for enhancing drug transdermal absorption. However, due to the unique structural components of ILs, the design of efficient ILs and elucidation of action mechanisms remain to be explored. In this review, basic design principles of ideal ILs for transdermal drug delivery system (TDDS) are discussed considering melting point, skin permeability, and toxicity, which depend on the molar ratios, types, functional groups of ions and inter-ionic interactions. Secondly, the contributions of ILs to the development of TDDS through different roles are described: as novel skin penetration enhancers for enhancing transdermal absorption of drugs; as novel solvents for improving the solubility of drugs in carriers; as novel active pharmaceutical ingredients (API-ILs) for regulating skin permeability, solubility, release, and pharmacokinetic behaviors of drugs; and as novel polymers for the development of smart medical materials. Moreover, diverse action mechanisms, mainly including the interactions among ILs, drugs, polymers, and skin components, are summarized. Finally, future challenges related to ILs are discussed, including underlying quantitative structure-activity relationships, complex interaction forces between anions, drugs, polymers and skin microenvironment, long-term stability, and safety issues. In summary, this article will promote the development of TDDS based on ILs.