Due to its abundance in blood, a great deal of research has been undertaken to develop efficient biosensors for serum albumin and provide insight into the interactions that take place between these biosensing molecules and the protein. Near-infrared (NIR, >700 nm) organic dyes have been shown to be effective biosensors of serum albumin, but their effectiveness is diminished in whole blood. Herein, it is shown that an NIR sulfonate indolizine-donor-based squaraine dye, SO3SQ, can be strengthened as a biosensor of albumin through the addition of biocompatible ionic liquids (ILs). Specifically, the IL choline glycolate (1:1), at a concentration of 160 mM, results in the enhanced fluorescence emission ("switch-on") of the dye in the presence of blood. The origin of the fluorescence enhancement was investigated via methods, including DLS, ITC, and molecular dynamics. Further, fluorescence measurements were conducted to see the impact the dye-IL system had on the fluorescence of the tryptophan residue of human serum albumin (HSA), as well as to determine its apparent association constants in relation to albumin. Circular dichroism (CD) spectroscopy was used to provide evidence that the dye-IL system does not alter the secondary structures of albumin or DNA. Our results suggest that the enhanced fluorescence of the dye in the presence of IL and blood is due to diversification of binding sites in albumin, controlled by the interaction of the IL-dye-albumin complex.