2-amino-5-nitrobenzyl alcohol is primarily used as an intermediate in the synthesis of various dyes and pigments. Its nitro and amino functional groups make it a valuable building block in the production of azo dyes, which are widely used in the textile industry for coloring fabrics. Additionally, it serves as a precursor in the synthesis of certain pharmaceuticals, particularly those involving nitroaromatic compounds. The compound's structure allows for further chemical modifications, making it useful in organic synthesis and research applications where nitro and amino groups are required for specific reactions.