N-(2-hydroxyethyl)-2-phenylacetamide is primarily utilized in the pharmaceutical industry as an intermediate in the synthesis of various active pharmaceutical ingredients (APIs). Its structure makes it a valuable building block for the development of drugs targeting neurological disorders, particularly those related to pain management and sedation. Additionally, it finds application in the formulation of cosmetic products, where it acts as a skin conditioning agent, helping to improve the texture and hydration of the skin. Its mild properties make it suitable for use in sensitive skin formulations. Furthermore, it is explored in research for its potential anti-inflammatory and analgesic properties, contributing to the development of novel therapeutic agents.