N-Acetyl-L-tyrosine ethyl ester monohydrate is widely used in the pharmaceutical and cosmetic industries due to its beneficial properties. In pharmaceuticals, it serves as a precursor in the synthesis of various drugs, particularly those targeting neurological and metabolic disorders. Its ability to cross the blood-brain barrier makes it valuable in developing treatments for conditions like depression, anxiety, and cognitive impairments. Additionally, it is utilized in research to study neurotransmitter regulation and brain function.

In the cosmetic industry, this compound is incorporated into skincare products for its antioxidant properties, which help protect the skin from oxidative stress and environmental damage. It is also used to enhance the stability and efficacy of formulations, contributing to improved skin texture and appearance. Furthermore, its role in promoting collagen synthesis makes it a key ingredient in anti-aging products.