In this work, density functional theory (DFT) calculations were carried out to study the role of the explicit treatment of four different choline-based ionic liquids (CS, CP, NS, and NP) by utilizing two different cations and anions in the tautomeric equilibrium of ethyl acetoacetate (EAA). The involvement of the acidic N–H proton from the cationic part of NS and NP ionic liquid offers the possibility to have two more additional transition states for the tautomeric equilibrium of EAA. The computed results demonstrated that a high activation free energy barrier (ΔG^‡_E→K = 49.4 kcal mol⁻¹) is associated with the direct enol to keto (E → K) interconversion via a 4-membered ring transition state. Upon explicit involvement of the cationic part of ionic liquids in the tautomeric equilibrium via a 6-membered ring transition state (CAT), ΔG^‡_E→K is substantially reduced to 21.88 kcal mol⁻¹. Further, ΔG^‡_E→K is drastically reduced to 10.57 kcal mol⁻¹ upon the involvement of the anionic part of the ionic liquid explicitly via an 8-membered ring transition state (AAT). The W-shaped TS in the CAT pathway causes steric hindrance and increases the energy penalty, while the sickle-shaped TS in AAT facilitates easy proton transfer without the influence of the steric factor. In addition, the RDG scatter graphs predict large negative values of ρ*, which indicate that the hydrogen bonding network in AAT is stronger, enhancing the delocalization of the electron density. The QTAIM analysis substantiated the role of intermolecular hydrogen bonding interactions between the ionic liquid and EAA and within the anion–cation pair in stabilizing the keto group of EAA. Besides, the involvement of the acidic N–H proton in the transition state is the key factor in influencing the energetics of the keto–enol tautomerization reaction. The present study illustrates molecular-level insights into the role of individual ions of ionic liquids and also provides adequate ideas for designing novel ionic liquid-based catalysts for industrially relevant chemical reactions.