This review summarizes recent applications of ionic liquids (ILs) as 'green' solvents and extractants in the extraction and separation of Rare Earths (REs), which are widely used in a variety of high-tech products in mining, separation, and smelting can greatly damage the environment. Conventional imidazolium-based ILs as diluents are more active than non-coordinating solvents such as kerosene and n-heptane in the extraction of REs including the co-existing thorium. Imidazolium cations can be involved in REs cation exchange or in forming new complexes with REs(III) ions. Quaternary ammonium- and phosphonium-based ILs with functional anions could be considered as bifunctional IL extractants (Bif-ILEs) for the separation of REs due to their following properties: the capacity to undergo facile synthesis route, high extraction ability and selectivity, low acid-base consumption, and easy stripping. The inner synergistic neutral complex extraction of Bif-ILEs will effectively avoid the production of ammonia-nitrogen or high content of Na+ or Ca2+ in wastewater, which is partly caused by the "saponification" of acidity extractant, such as P507, during the REs industrial separation process. The large amount of wastewater production must be prohibited because of "Emission Standards of Pollutants from Rare Earths Industry" promulgated by China's Ministry of Environment Protection (MOP) in 2011. Serving as extractants, additives, and templates, ILs are likewise used in the preparation of functionalized adsorption materials (i.e., sol-gel silica, Amberlite XAD series resins, IL modified Merrifield resin). These adsorption materials also show high efficiency in the enrichment of dilute leach liquor of the weathered crust elution-deposited REs ore and the enhanced separation of high-value adding heavy REs. The huge environmental challenges from highly polluted REs hydrometallurgy in China require the greener separation technique to solve these issues, and the novel ILs-based separation materials and techniques in both liquid/liquid and liquid/solid extraction and separation of various REs resources are expected to demonstrate the potential practical applications in the future.