Allylisopropylacetylurea is primarily used in the pharmaceutical industry as a sedative and hypnotic agent. It is effective in treating insomnia and other sleep disorders by inducing a calming effect on the central nervous system. Additionally, it has been explored for its potential use in managing mild anxiety due to its tranquilizing properties. In some cases, it is also utilized as an intermediate in the synthesis of other therapeutic compounds, contributing to the development of new medications. Its application is carefully regulated due to its potent effects on the nervous system, ensuring it is used under medical supervision.