Lignin holds tremendous potential as a renewable feedstock for upgrading to a number of high-value chemicals and products that are derived from the petroleum industry at present. Since lignin makes up a significant fraction of lignocellulosic biomass, co-utilization of lignin in addition to cellulose and hemicelluloses is vital to the economic viability of cellulosic biorefineries. The recalcitrant nature of lignin, originated from the molecule's compositional and structural heterogeneity, however, poses great challenges toward effective and selective lignin depolymerization and valorization. Ionic liquid (IL) is a powerful solvent that has demonstrated high efficiency in fractionating lignocellulosic biomass into sugar streams and a lignin stream of reduced molecular weight. Compared to thermochemical methods, biological lignin deconstruction takes place at mild temperature and pressure while product selectivity can be potentially improved via the specificity of biocatalysts (lignin degrading enzymes, LDEs). This review focuses on a lignin valorization strategy by harnessing the biomass fractionating capabilities of ILs and the substrate and product selectivity of LDEs. Recent advances in elucidating enzyme-IL interactions as well as strategies for improving enzyme activity in IL are discussed, with specific emphases on biocompatible ILs, thermostable and IL-tolerant enzymes, enzyme immobilization, and surface charge engineering. Also reviewed is the protein engineering toolsets (directed evolution and rational design) to improve the biocatalysts' activity, stability and product selectivity in IL systems. The alliance between IL and LDEs offers a great opportunity for developing a biocatalytic route for lignin valorization.