Room temperature ionic liquids (RTILs), considered as "designers' solvents", are attracting a great attention because of their possibility to be tailored based on property requirements. The ionic liquids designed and synthesized for carrying out specified task are referred as functionalized ionic liquids, which show great application potential in various processes. The efforts to produce functionalized ionic liquids, characterize them, and evaluate their properties and applications are presented in this thesis. In chapter 1 the recent developments in ionic liquid functionalization are highlighted. Chapter 2 describes the synthesis and characterization of imidazolium salts in which a nitrile group is attached to the alkyl side chain (single-armed as well as double-armed). The nitrile group was chosen as it is a promising donor to transition metals such as palladium and platinum. The physicochemical properties of these new ionic liquids are described and it is shown how the length of the alkyl unit linking the imidazolium ring and the CN group influences the melting point of the ionic liquid. The third chapter describes palladium complexation reactions with the nitrile functionalized imidazolium ionic liquids (prepared as described in Chapter 2). Their application in C-C coupling and hydrogenation reactions are described. It will be shown that the palladium complexes serve as precursors to nanoparticle catalyst reservoirs and are very efficiently stabilized by the nitrile-functionalized ionic liquids. In chapter 4, the synthesis of a series of nitrile functionalized ionic liquids based on the N-butylnitrile pyridinium cation is reported and their suitability as solvents for palladium-catalyzed biphasic Suzuki and Stille coupling reactions is demonstrated. TEM images reveal that nanoparticles are formed in situ in Stille reactions and show that the nitrile-functionalized ionic liquid exert a superior nanoparticle-stabilizing effect compared to non-functionalized ionic liquids. This allows excellent catalyst lifetimes. In the fifth chapter the synthesis and characterization of a series of ionic liquids incorporating the allyl functionality and some nascent reactions that they undergo, indicating that they are useful precursors to a wide range of other functionalized ionic liquids, will be described. Chapter 6 reports on a concept of "dual-functionalized" ionic liquids. Specifically imidazolium cations with various functionalities are combined with the nitrile functionalized anion [CH3CH(BF3)CH2CN]-, aiming at reducing the melting point and visocity of ionic liquids. In the final chapter the ionic liquid, 1-methyl-3-(4-vinylbenzyl)-imidazolium chloride, is prepared and polymerized to form a macromolecule that is subsequently used as a transition metal nanoparticle stabilizer. A methodology that enables transition metal nanoparticle transfer between liquid phases, via surface modification of the nanoparticles by anion exchange, is described.