3-Iodo-o-xylene is primarily used as an intermediate in organic synthesis, particularly in the production of specialty chemicals and pharmaceuticals. It serves as a key building block in the development of complex molecules due to its reactive iodine atom, which facilitates various coupling reactions like Suzuki and Heck reactions. This compound is also employed in the synthesis of agrochemicals and dyes, where its aromatic structure and halogen functionality are essential for creating specific chemical properties. Additionally, it finds use in research and development for exploring new chemical reactions and pathways.