Poly-3,4-ethylenedioxythiophene:polystyrenesulfonate (PEDOT:PSS) is a water-processable conducting polymer with promise for use in transparent flexible electrodes and thermoelectric devices, but its conductivity is not satisfactory. Its low conductivity is attributed to the formation of hydrophilic/insulating PSS outer layers encapsulating the conducting/hydrophobic p-doped PEDOT cores. Recently a significant conductivity enhancement has been achieved by adding ionic liquid (IL). It is believed that ion exchange between PEDOT:PSS and IL components helps PEDOT to decouple from PSS and to grow into large-scale conducting domains, but the exact mechanism is still under debate. Here we show through free energy calculations using density functional theory on a minimal model that the most efficient IL pairs are the least tightly bound ones with the lowest binding energies, which would lead to the most efficient ion exchange with PEDOT:PSS. This spontaneous ion exchange followed by nanophase segregation between PEDOT and PSS, with formation of a π-stacked PEDOT aggregate decorated by IL anions, is also supported by molecular dynamics performed on larger PEDOT:PSS models in solution. We also show that the most efficient IL anions would sustain the highest amount of charge carriers uniformly distributed along the PEDOT backbone to further enhance the conductivity, providing that they remain in the PEDOT domain after the ion exchange. Hence, our design principle is that the high-performance IL should induce not only an efficient ion exchange with PEDOT:PSS to improve the PEDOT morphology (to increase mobility) but also a uniform high-level p-doping of PEDOT (to enhance intrinsic conductivity). Based on this principle, a promising (electron-withdrawing, but bulky, soft, and hydrophobic) new IL pair is proposed.