Z-Ala-Gly-OH is primarily used in peptide synthesis and biochemical research. It serves as a building block for creating more complex peptides, aiding in the study of peptide structure and function. This compound is also utilized in the development of pharmaceuticals, particularly in designing peptide-based drugs. Additionally, it finds application in enzymatic studies to understand substrate specificity and enzyme mechanisms. Its role in synthesizing model peptides helps researchers explore protein folding and interactions.