Phenylacetic acid hydrazide is primarily used in the synthesis of various pharmaceutical compounds. It serves as a key intermediate in the production of antibiotics, particularly in the development of cephalosporin derivatives. The compound is also utilized in the preparation of hydrazone derivatives, which have applications in medicinal chemistry for their potential antimicrobial and anticancer properties. Additionally, it finds use in organic synthesis as a building block for creating complex molecules with specific biological activities. Its role in the development of new therapeutic agents makes it valuable in drug discovery and research.