Tetrahydrophthalimide is primarily used as an intermediate in the synthesis of agricultural chemicals, particularly plant growth regulators and herbicides. It plays a key role in the production of indole-3-acetic acid analogs, which are synthetic auxins used to control plant growth. Due to its stable cyclic imide structure, it is also employed in the development of specialty polymers and pharmaceuticals where a rigid, polar backbone is beneficial. Its reactivity allows for functionalization at the nitrogen and carbonyl sites, making it valuable in organic synthesis for building more complex molecules.