Ionic liquids (ILs) have become an alternative green solvent for storage and for stability of DNA. However, an in-depth understanding of binding and molecular interactions between ILs and DNA is needed. In this respect, magnetic ILs (MILs) are promising due to their tunable physicochemical properties. Various spectroscopic techniques and molecular simulations have been employed to unravel the critical factors of the strength and binding mechanism of MILs with DNA. UV-vis spectra unravel the multimodal binding of MILs with DNA, and the intrusion of IL molecules into the minor groove of DNA has been observed from dye displacement studies. Fluorescence correlation spectroscopic studies and scanning electron microscopy confirm the compaction of the DNA. ITC and molecular docking studies estimate the binding affinity of DNA with MILs, of ∼7 kcal mol−1. The 1 μs long-MD simulations give insight into the structural changes in the DNA in the MIL environment. Due to strong interaction with choline ions in the close vicinity, DNA helixes bend or squeeze in length and dilate in diameter (elliptical → spherical), leading to compaction. The post-MD parameters suggest a stronger interaction with [Ch]2[Mn] IL than with [Ch][Fe] IL; hence, the former induces DNA compaction to a more significant extent. Furthermore, decompaction is observed with the addition of sodium salts and is characterized using spectroscopic methods.