Ionic liquids (ILs) are organic salts that are liquid at ambient temperature. They consist of organic cations (imidazolium, pyridinium, sulfonium, phosphonium, etc.) and organic or inorganic anions. Ionic liquids have emerged as a new class of solvents as an alternative to environmentally volatile organic solvents for practical applications due to their unique combination of low volatility, low melting point, chemical stability, high conductivity, wide electrochemical window, ability to dissolve organic and inorganic solutes and gases and catalytic properties. High cost of ionic liquids is compensated by recycling. Some ionic liquids such as Imidazolium and pyridinium salts with long alkyl substituents are toxic. However toxicity of ionic liquids is monitored by understanding ionic liquid structure activity relationships and it is possible to design task specfic, non toxic, environmentally benign ionic liquids. Here we report an overview of synthesis of ionic liquids and their applications in organic chemistry e.g. carbon-cabon bond forming reactions, carbonnitrogen bond forming reactions, condensation reactions and synthesis of various heterocyclic compounds from the point of view of development and practical utility.