2-Iodoethanol is primarily used in organic synthesis as a versatile intermediate. It is often employed in the preparation of various pharmaceuticals and agrochemicals due to its ability to introduce iodine and hydroxyl groups into molecules. The compound is also utilized in the synthesis of heterocyclic compounds, which are important in medicinal chemistry. Additionally, 2-Iodoethanol serves as a precursor in the production of radiopharmaceuticals, where iodine isotopes are used for diagnostic imaging and cancer therapy. Its reactivity makes it valuable in cross-coupling reactions, facilitating the creation of complex organic structures.