Dimethyl iodoterephthalate is primarily used as an intermediate in organic synthesis, particularly in the production of advanced materials and specialty chemicals. It plays a significant role in the development of liquid crystal displays (LCDs) and other electronic components due to its ability to form stable and precise molecular structures. Additionally, it is utilized in the synthesis of pharmaceuticals, where its unique properties aid in the creation of complex drug molecules. Its application in polymer chemistry is also notable, as it contributes to the production of high-performance polymers with specific optical and mechanical properties.