Transesterification of dimethyl carbonate with glycerol has been investigated using 1,4-diazabicyclo [2.2.2] octane (DABCO) based ionic liquid as a catalyst. DABCO reacted with dimethyl carbonate to form ionic liquid as the reaction progressed. Though the basicity of DABCO based ionic liquid was lower than that of DABCO, the catalytic activity and selectivity to glycidol was higher with DABCO based ionic liquid as a catalyst, indicating that basicity may not be the only criterion in deciding activity and selectivity of the reaction. The cooperative effect of the cation and anion of the ionic liquid is responsible for the observed results. The best results (97% glycerol conversion with 83% selectivity to glycidol and 17% selectivity to glycerol carbonate) were obtained using DABCO based ionic liquid as a catalyst. A plausible mechanism involving the role of both the cation and anion of the ionic liquid has been proposed.