Pyrolytic sugars can be converted to bioethanol or valuable platform chemicals through fermentation. However, the aromatic contaminants need to be removed from the sugar stream before the refinery. The use of liquid–liquid extraction with ionic liquids (ILs) for this separation was investigated using a model system comprising aqueous levoglucosan solutions with a guaiacol impurity. The extraction performances of 41 ILs were simulated using COSMO-RS. The simulation results demonstrated that ILs with the most hydrophobic cations exhibited the highest affinities for guaiacol, and the distribution coefficients of both guaiacol and levoglucosan could be correlated to the anion polarities and hence their hydrogen bond interaction abilities with the solutes. Four phosphonium ILs, three imidazolium ILs, and an organic solvent ethyl acetate (EA) were selected to perform the extraction experiments. Trihexyl(tetradecyl)phosphonium dicyanamide (P666,14[N(CN)2]) showed the highest experimental selectivity of 2159 and almost no levoglucosan was extracted. Two conceptual processes were designed for separation of guaiacol from water using P666,14[N(CN)2] and EA respectively, based on liquid–liquid equilibrium data for the systems P666,14[N(CN)2] + guaiacol + H2O and EA + guaiacol + H2O, experimentally determined in this work. The results showed that an EA-based process consisted of more unit operations and required five times more energy (12.42 MJ/kg guaiacol) than an IL-based process (2.15 MJ/kg guaiacol).