Azido-FTY720 is primarily used in biochemical research as a tool compound to study the mechanisms and pathways involving sphingosine-1-phosphate (S1P) receptors. It serves as a photoaffinity probe, allowing researchers to investigate protein interactions and receptor binding sites through UV light-induced crosslinking. This enables the identification and mapping of S1P receptor targets in cellular and molecular studies. Additionally, azido-FTY720 is utilized in the development of novel therapeutic strategies for immune modulation, particularly in conditions like autoimmune diseases and organ transplantation. Its azide group facilitates conjugation with other molecules, making it valuable for labeling and tracking purposes in experimental setups.