Ionic liquids (ILs) are considered as "green solvents" for more than 2 decades. However, recent studies suggest that some ILs exhibit greater toxicity compared to common solvents. As a proactive effort to better understand the molecular origin of the cytotoxicity, the work herein presents the systemic characterization of the interaction between model membrane composed of fatty acids and popular imidazolium-based hydrophilic IL. The fusion kinetics between the vesicles demonstrates the swelling of the vesicle. Further, membrane fluidity is determined using the isomerization kinetics of a lipophilic dye, merocyanine-540, and in the presence of IL, the fluidity of the inner water pool of the vesicle is increased. The results can be directly correlated to the cytotoxicity generated by IL in K562 cell, a human erythroleukemic cell line. High-concentration IL,ruptures the cell membrane and causes membrane permeabilization. Thus, the results would help to facilitate the rational design of nontoxic ILs.