5-Iodoisobenzofuran-1,3-dione is primarily utilized in organic synthesis as a versatile intermediate for constructing complex molecules. Its application is prominent in the development of pharmaceuticals, where it serves as a key building block for active pharmaceutical ingredients (APIs). The compound is particularly valuable in the synthesis of heterocyclic compounds, which are essential in drug discovery and development. Additionally, it is employed in material science for the preparation of specialized polymers and coatings, leveraging its reactive iodine and anhydride functionalities. Its role in cross-coupling reactions also makes it useful in creating advanced organic materials with tailored properties.