Widely used in microbiology as a chromogenic substrate for detecting esterase and lipase activity. When cleaved by the target enzyme, it releases 5-bromo-4-chloroindoxyl, which spontaneously dimerizes and oxidizes to form an insoluble blue indigo precipitate, enabling visual identification of positive reactions in colony screening and enzymatic assays. Its lipophilic octanoate tail improves solubility in media and enhances cell membrane permeability, allowing detection of intracellular enzyme expression in live cells. Commonly applied in histochemistry, agar-based assays, and screening for microbial lipolytic activity with clear, localized staining and low background interference.