Pyrrole-2-acetic acid is primarily used as a key intermediate in the synthesis of pharmaceuticals and biologically active compounds. It serves as a building block in the preparation of porphyrin-like structures, which are essential in the development of heme analogs and other tetrapyrrole compounds involved in oxygen transport and electron transfer processes.

It is also employed in the fabrication of conductive polymers and organic semiconductors, where its pyrrole core contributes to electron-rich systems useful in electronic materials. In medicinal chemistry, derivatives of pyrrole-2-acetic acid have shown potential in anti-inflammatory and antimicrobial applications due to their structural similarity to naturally occurring bioactive pyrroles.

Additionally, it is used in agrochemical synthesis, particularly in the development of herbicides and plant growth regulators, where its structure helps modulate biological activity in target organisms. Its versatility in forming stable ring systems makes it valuable in heterocyclic chemistry research and drug discovery.