Ionic liquids are low melting point salts that represent an exciting new class of reaction solvents for catalysis. Being composed entirely of ions, they possess negligible vapour pressures, and the wide range of possible cations and anions means that other solvent properties may be easily controlled. There is currently great interest in the use of these materials as solvents for a wide range of applications, including catalysis. Many reactions show advantages when carried out in ionic liquids, either with regard to enhanced reaction rates, improved selectivity, or easier reuse of catalysts. This review is intended to bring the reader up to date on the developments involving ionic liquids in catalytic applications over the previous 18 months. Recent spectroscopic investigations into the solvent properties of ionic liquids with relevance to catalysis are discussed first, followed by a critical review of the major developments in transition metal, Lewis acid, and enzyme catalysed processes in these solvents. Particular emphasis is given to the combination of ionic liquids with supercritical fluids, Pd-based catalysts, and enzymes. Wherever possible, the results gained in ionic liquids are critically compared with those obtained using other catalytic systems.