A new ionic liquid (IL), 1-butyl-3-methylimidazolium cholate, was first synthesized through an ion exchange reaction of 1-butyl-3-methylimidazolium chloride with sodium cholate. Stable aqueous dispersions of graphene were achieved by exfoliating graphite in the presence of the IL under ultrasonication. Both transmission electron microscopy and Raman measurements showed that the IL-stabilized graphene (IL–G) sheets existed with only a few (<5) layers. Furthermore, the IL–G was used to immobilize noble metal nanoparticles (Pt, Pd, Ru, Rh, etc), and a series of graphene–metal (G–M) composites with metal size ≤2 nm and very narrow size distributions were obtained. The resulting G–M exhibited superior catalytic performance with respect to hydrogenation of arenes. In particular, the as-prepared G–Ru with Ru content of 5% was very active for the hydrogenation of benzene to hexane with a turnover frequency as high as 6000 h−1. The catalysts could be reused without detectable loss of activity, a result of their stable structure.