Direct hydrogenation of CO2 to C2+ hydrocarbons is very interesting, but achieving this transformation below 200 °C is challenging and seldom reported. Herein, a homogeneous catalytic system was developed composed of the ionic liquid 1‐butyl‐3‐methylimidazolium hexafluorophosphate ([BMIm][PF6]), Pd(PtBu3)2, FeCl2, and the ligand 4,5‐bis(diphenylphosphino)‐9,9‐dimethylxanthene (Xantphos) for hydrogenation of CO2 under mild conditions, which resulted in C2–C4 hydrocarbons in selectivities up to 98.3 C‐mol % at 180 °C. The combination of [BMIm][PF6]) with Xantphos endowed the Pd–Fe catalysts with the ability of activating CO2 and H2 simultaneously via [HPd(PtBu3)(BMIm‐COO)(BMIm)(PF6)Fe]+ species, thus catalyzing the formation of C2–C4 hydrocarbons through CO2 hydrogenation. In addition, this catalytic system is stable and recyclable, which may have promising applications.