Lewis acidic ionic liquid (IL) of 1-octyl-3-methylimidazolium tetrachloroferrates ([Omim]FeCl4) with an interesting structure, was synthesized and introduced as a highly effective catalyst and also as extractive solvent in oxidative desulfurization (ODS) of model and real diesel fuels with H2O2 oxidant. FT-IR, H-NMR and TG-DSC analysis were used for characterization of the prepared ILs. GC-FID, GC-PFPD and GC-MS measurements were also employed to investigate the ODS yields and mechanism. The adequate structure and acidic properties of [Omim]FeCl4 allowed removal of thiophenic compounds with high efficiency in an extraction and then oxidation process. The effects of the major processing variables on ODS performance of [Omim]FeCl4 were studied in detail. At the optimal conditions of V-IL/V-oil of 1/10, 0/8 molar ratio of 5, reaction time of 15 min and room temperature, BT and DBT were totally eliminated, and 4,6-DMDBT was removed by 99% from the model diesel. Moreover, [Omim]FeCl4 was able to desulfurize two real diesel fuels containing 590 and 2573 ppmw of sulfur with the efficiency of 85% and 61.2%, respectively, at a short time of 15 min. The experimental results also showed a remarkable selectivity of 0.919 for elimination of thiophenic compounds in competition with non-sulfur aromatic model of 2-methyl naphthalene. [Omim]FeCl4 exhibited an excellent recyclability with no significant decline in activity after use in 7 reaction cycles. An overall mechanism was also suggested for desulfurization by the proposed system.