Electrochemical reduction of CO2 is a novel research field towards a CO2-neutral global economy and combating fast accelerating and disastrous climate changes while finding new solutions to store renew-able energy in value-added chemicals and fuels. Ionic liquids (ILs), as medium and catalysts (or support-ing part of catalysts) have been given wide attention in the electrochemical CO2 reduction reaction (CO2RR) due to their unique advantages in lowering overpotential and improving the product selectivity, as well as their designable and tunable properties. In this review, we have summarized the recent pro-gress of CO2 electro-reduction in IL-based electrolytes to produce higher-value chemicals. We then have highlighted the unique enhancing effect of ILs on CO2RR as templates, precursors, and surface functional moieties of electrocatalytic materials. Finally, computational chemistry tools utilized to understand how the ILs facilitate the CO2RR or to propose the reaction mechanisms, generated intermediates and products have been discussed.