The development of a new class of metalworking fluids (MWFs) with unique properties is essential to achieve energy-efficient and sustainable growth. Ionic liquids (ILs) are molten salts at room temperature, which consist of cations and anions. Recently, ILs emerged as a new class of lubricant or lubricant additives due to their novel characteristics. Nowadays, halogen-free ILs become a potential area of research due to their non-corrosive and non-toxic nature, which is one of the limiting factors of commonly used halogenated ILs. They are viable options for addressing some of current societal key concerns by evolving as an energy-efficient, clean, and sustainable alternative owing to their novel physical, chemical, thermal and biological characteristics. Many studies showed that the presence of various kinds of cations, anions, and alkyl chain length plays a major role in the performance of IL-based MWFs. This paper reviews the halogen-free ILs from the perspective of lubricant or lubricant additives, addressing their physicochemical properties, tribological performance, and lubrication mechanism in detail. Also, the use of ILs in machining, hybrid ILs, and toxic effects of halogenated ILs are discussed. Further, future prospects of halogen-free ILs are suggested.