Phenethyl 2-chloroacetate is primarily used in organic synthesis as an intermediate compound. It is often employed in the production of various pharmaceuticals, agrochemicals, and specialty chemicals. The compound's reactive chloroacetate group makes it a valuable building block for creating more complex molecules through esterification or substitution reactions. Additionally, it can be utilized in the development of fragrances and flavoring agents due to its aromatic phenethyl moiety. Its application extends to research laboratories, where it serves as a reagent for studying chemical reactions and developing new synthetic pathways.