Lithium hydride is primarily used as a source of hydrogen gas in military and aerospace applications. When reacted with water, it rapidly releases hydrogen, making it useful in emergency hydrogen generation systems, such as for inflating life rafts or weather balloons.

It serves as a reducing agent in organic synthesis, particularly in the preparation of complex hydrides and metal hydrides. Due to its high reactivity, it is employed in the production of lithium aluminum hydride and lithium borohydride, which are important reducing agents in chemical manufacturing.

In the nuclear industry, lithium hydride is used as a neutron absorber and shielding material, especially in reactors and storage systems, due to the high neutron cross-section of lithium-6. It is also investigated for use in hydrogen storage systems for fuel cell technologies, owing to its high hydrogen content by weight.

Additionally, it has been used in high-temperature applications, such as in ceramics and glass production, where it acts as a flux or additive to modify material properties.