I live and work in Florida and my spouse live and work in Illinois, can we file MFJ for federal and file separate for state?

You CAN file jointly on the federal return.

It is a moot point for Florida, as Florida has NO state income tax.

You DO have the option of filing the Illinois state return as Married Filing Separately.

The only thing I would add to AtlantaTaxExpert's response is that (a) your wife must not have been an IL resident at any time during the year and (b) she must not have any IL-source of income. Since the IL return starts with the federal return as its basis, you will need to develop a "dummy" federal return for yourself as Married Filing Separately. By the way, as an IL resident I've been doing this myself for the past few years with no issues.

ebaines always has good advice; LISTEN to him!