Used in the synthesis of azo dyes, sodium 2-naphtholate acts as a key coupling component in dye manufacturing, particularly for producing red and orange shades. It readily reacts with diazonium salts to form colored azo compounds used in textile, leather, and paper industries. It also serves as an intermediate in the production of certain pharmaceuticals and antioxidants. Its reactivity makes it valuable in organic synthesis for building complex aromatic structures.