5,5'-(hydroxyphosphoryl)diisophthalic acid is primarily utilized in the development of advanced materials, particularly in the field of polymer chemistry. Its unique structure allows it to act as a building block for creating high-performance polymers with enhanced thermal stability and mechanical properties. These polymers are often employed in industries requiring durable materials, such as aerospace and automotive manufacturing.

Additionally, this compound finds application in the synthesis of metal-organic frameworks (MOFs). Its ability to coordinate with metal ions makes it a valuable component in designing MOFs with specific pore sizes and surface areas, which are crucial for applications in gas storage, separation, and catalysis.

In the realm of nanotechnology, 5,5'-(hydroxyphosphoryl)diisophthalic acid is used to fabricate nanostructured materials. These materials are explored for their potential in drug delivery systems, where controlled release and targeted delivery of therapeutic agents are essential.

Furthermore, its phosphonate groups make it suitable for use in the preparation of ion-exchange resins. These resins are employed in water treatment processes to remove heavy metals and other contaminants, ensuring the purification of water for industrial and domestic use.