A magnetic ionic liquid, which shows a strong response to magnetic field, has been discovered. We synthesized an ionic liquid by mixing 1-butyl-3-methylimidazolium chloride ([bmim]Cl) and FeCl3, in anticipation of unique magnetic properties due to the possible local ordering of the magnetic anions. The visible absorption spectroscopy has shown that this liquid contains the high spin FeCl4- as the anion. Raman spectroscopy has indicated that it contains bmim(+) as the cation. It has thus been confirmed that the prepared liquid is [bmim]FeCl4. The liquid [bmim]FeCl4 responded strongly to magnetic field. The SQUID measurements have shown that it is paramagnetic having a large magnetic susceptibility of 40.6 x 10(-6) emu g(-1). The present discovery of a magnetic ionic liquid has opened up a new research area of the magnetism of liquids.