The role and enlarged importance of ionic liquids (ILs) in chemical reactions were already exhaustively demonstrated. The aim of this review is to promote the family of the phosphonium‐based ILs used as reagents and catalysts, which gained increased interest in the last decade. The common and beneficial properties of ILs refer to their negligible vapour pressure, non‐toxicity, reusability, and high thermal stability. Therefore, phosphonium‐based ionic liquids are used successfully as catalysts and reagents in many chemical reactions, and additionally allow the syntheses in mild reaction conditions. Phosphonium ILs have proved their catalytic efficiency in many reactions such as epoxidation of olefins and allylic alcohol, in synthesis of alpha‐aminophosphonates, beta‐ketophosphonates, nitrogen‐containing bisphosphonates, the Michaelis‐Arbuzov reactions, esterification, coupling reaction, aromatic chlorination, dehydrogenation. The major advantage of phosphonium‐based ILs used as catalysts is that they can be reused with only little loss of catalytic activity. Phosphonium ILs revealed their potential as Wittig reagents, halogenation reagents for bromination and bromo‐chlorination reactions with alkenes and alkynes, as monomer and as initiator in frontal polymerization of acrylates. From the literature data, it can be concluded that due to their structure and physical‐chemical properties phosphonium ILs can be tailored function of their purpose.