Ionic liquids have been studied for their special solvent properties in a wide range of processes, including reactions involving carbohydrates such as cellulose and glucose. Biomass is a widely available and renewable resource that is likely to become an economically viable source of starting materials for chemical and fuel production, especially with the price of petroleum set to increase as supplies are diminished. Biopolymers such as cellulose, hemicellulose and lignin may be converted to useful products, either by direct functionalisation of the polymers or depolymerisation to monomers, followed by microbial or chemical conversion to useful chemicals. Major barriers to the effective conversion of biomass currently include the high crystallinity of cellulose, high reactivity of carbohydrates and lignin, insolubility of cellulose in conventional solvents, as well as heterogeneity in the native lignocellulosic materials and in lignin itself. This combination of factors often results in highly heterogeneous depolymerisation products, which make efficient separation difficult. Thus the extraction, depolymerisation and conversion of biopolymers will require novel reaction systems in order to be both economically attractive and environmentally benign. The solubility of biopolymers in ionic liquids is a major advantage of their use, allowing homogeneous reaction conditions, and this has stimulated a growing research effort in this field. This review examines current research involving the use of ionic liquids in biomass reactions, with perspectives on how it relates to green chemistry, economic viability, and conventional biomass processes.