One main limiting factor for the technoeconomics of future bioprocesses that use ionic liquids (ILs) is the recovery of the expensive and potentially toxic IL. We have demonstrated a new series of phase-separable ionic liquids, based on the hydrophobic tetraalkylphosphonium cation ([PRRRR]+), that can dissolve lignin in the neat state but also hemicellulose and high-purity cellulose in the form of their electrolyte solutions with dipolar aprotic solvents. For example, the IL trioctylmethylphosphonium acetate ([P8881][OAc]) was demonstrated to dissolve up to 19 wt % of microcrystalline cellulose (MCC) at 60 °C with the addition of 40 wt % of DMSO. It was found that the MCC saturation point is dependent on the molar ratio of DMSO and IL in solution. At the optimum saturation, a ∼1:1 molar ratio of [P8881][OAc] to anhydroglucose units is observed, which demonstrates highly efficient solvation. This is attributed to the positive contribution that these more amphiphilic cation–anion pairs provide, in the context of the Lindman hypothesis. This effective dissolution is further illustrated by solution-state HSQC NMR spectroscopy on MCC. Finally, it is also demonstrated that these electrolytes are phase separable by the addition of aqueous solutions. The addition of 10 % NaOAc solution allows a near quantitative recovery of high-purity [P8881][OAc]. However, increased volumes of aqueous solution reduced the recovery. The regenerated material was found to partially convert into the cellulose II crystalline polymorph.