Used in the production of dysprosium metal through electrolysis or metallothermic reduction, which is essential for manufacturing high-performance permanent magnets. These magnets are critical in electric vehicle motors, wind turbine generators, and various advanced electronic devices due to their strong magnetic properties at high temperatures.

Also serves as a component in fluoride glass and optical fibers for use in laser and fiber-optic communication systems.

Employed in research settings for doping in solid-state lasers and scintillator materials.

Its thermal neutron absorption capability makes it useful in nuclear reactor control applications.