The partial replacement of ruthenium by iron (“dilution”) provided enhanced catalytic activities and selectivities for bimetallic iron–ruthenium nanoparticles immobilized on a supported ionic liquid phase (FeRuNPs@SILP). An organometallic synthetic approach to the preparation of FeRuNPs@SILP allowed for a controlled and flexible incorporation of Fe into bimetallic FeRu NPs. The hydrogenation of substituted aromatic substrates using bimetallic FeRuNPs@SILP showed high catalytic activities and selectivities for the reduction of a variety of unsaturated moieties without saturation of the aromatic ring. The formation of a bimetallic phase not only leads to an enhanced differentiation of the hydrogenation selectivity, but even reversed the order of functional group hydrogenation in certain cases. In particular, bimetallic FeRuNPs@SILP (Fe:Ru = 25:75) were found to exhibit accelerated reaction rates for C═O hydrogenation within furan-based substrates which were >4 times faster than monometallic RuNPs@SILP. Thus, the controlled incorporation of the non-noble metal into the bimetallic phase provided novel catalytic properties that could not be obtained using either of the monometallic catalysts.