The massive use of synthetic, petroleum-based polymeric composites has disturbed the fragile environmental equilibrium of our planet. Composites made solely from polysaccharides can offer unique intrinsic properties such as renewability, biodegradability, easy availability, eco-friendliness, facile processing, flexibility, and exciting physico-mechanical characteristics. The development of green processing of lignocellulosic materials and bio-based polymers such as cellulose, starch, chitin, and chitosan, the most abundant biorenewable materials on earth, is urgent from the perspectives of both environmental protection and sustainability in materials industries. Recently, the enormous potential of ionic liquids (ILs) as an alternative to ecologically harmful conventional organic solvents has been well recognized. Presently, a wide range of pronounced approaches have been explored to further improve the performance of ionic liquid-based processing of polysaccharides for green composite manufacturing. This review presents recent technological developments in which the advantages of ionic liquids as a dissolution medium for polysaccharides for production of plethora of green composites have been gradually realized.