3-Amino-2-methylphenol is primarily used in the dye and pigment industry, where it serves as a key intermediate in the synthesis of various azo dyes. These dyes are widely applied in the textile industry for coloring fabrics, providing vibrant and long-lasting hues. Additionally, it is utilized in the production of hair dyes, contributing to the formulation of shades that offer excellent coverage and durability.

In the pharmaceutical sector, this compound is employed as a building block in the synthesis of certain active pharmaceutical ingredients (APIs). Its chemical structure allows it to be incorporated into molecules that exhibit therapeutic properties, making it valuable in drug development.

Furthermore, 3-Amino-2-methylphenol finds application in organic synthesis, where it is used to create complex organic compounds. Its reactivity and functional groups make it a versatile reagent in various chemical reactions, aiding in the production of specialty chemicals and intermediates.