Chitin biopolymer is a promising raw source for the preparation of biomaterials and has a high potential in the biomedical maket. Recent developments include solution processing of chitin in ionic liquids (ILs) as one of the most promising strategies for handling biopolymers. While ILs have assisted in numerous advancements in the preparation of chitin-based materials, there is a lack of consensus on both chitin's solubility values in the ILs and the ILs best suited for the purpose. Conflicting outcomes presumably arise from variations in precursor biomass origin, isolation methods, chitin's polymorphic forms, and the polymer's quality. The evidence cited in the literature supports the conclusion that the polymer's solubility values in the same IL depend on chitin quality. This comprehensive review is directed at sorting out all findings related to chitin dissolution in ILs based on the polymer's type and dissolution conditions and providing a deeper understanding of the dissolution process. The review also covers the methods of chitin isolation from biomass (extraction and pulping) with the help of ILs. Finally, the review offers a viewpoint on the preparation of chitin-based materials from IL-solutions.