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DMSO is frequently used as solvent in a number of chemical reactions. In particular it is an excellent reaction solvent for SN2 alkylations: it is possible to alkylate indoles with very high yields using potassium hydroxide as the base and a similar reaction also occurs with phenols. DMSO can be reacted with methyl iodide to form a sulfoxonium ion which can be reacted with sodium hydride to form a sulfur ylide. The methyl groups of DMSO are somewhat acidic in character (pKa=35) due to the stabilization of the resultant anions by the sulfoxide group.

DMSO was discovered in 1867, but was not used commercially until after WWII. Other than its use as a solvent, both in organic synthesis and industrial applications (polymer chemistry, pharmaceuticals and agrochemicals), DMSO also makes a very good paint stripper: it is able to remove many paints from both wood and metal in a small amount of time. It is thought to be much safer than many of the other chemicals used as paint strippers, such as nitromethane and dichloromethane.

In organic synthesis, DMSO can also be used in a number of oxidation reactions[1], the Pfitzner-Moffatt oxidation and the Swern oxidation.[2]

DMSO is also employed as a rinsing agent in the electronics industry and, in its deuterated form (DMSO-d6), is a useful solvent in NMR due to its ability to dissolve a wide range of chemical compounds and its minimal interference with the sample signals. In cryobiology DMSO has been used as a cryoprotectant and is still an important constituent of cryoprotectant vitrification mixtures used to preserve organs, tissues, and cell suspensions. It is particularly important in the freezing and long-term storage of embryonic stem cells and hematopoietic stem cell, which are often frozen in a mixture of 10% DMSO and 90% fetal calf serum. As part of an autologous bone marrow transplant the DMSO is re-infused along with the patient's own hematopoietic stem cell.

Use of DMSO in medicine dates from around 1963, when a University of Oregon Medical School team, headed by Stanley Jacob, discovered it could penetrate deeply through the skin and other membranes without damaging them and could carry other compounds deep into a biological system. Some people report an onion- or garlic-like taste after contact with the skin. This is likely due to catabolic processes which reduce DMSO to dimethyl sulfide. In the medical field DMSO is predominantly used as a topical analgesic, a vehicle for topical application of pharmaceuticals, as an anti-inflammatory and an antioxidant. It has been examined for the treatment of an extraordinary number of conditions and ailments. The Food and Drug Administration (FDA) has approved DMSO usage only for the palliative treatment of interstitial cystitis. Because it was first used several decades ago, it is currently not possible to patent it because of the 17 year length of pharmaceutical patents. This largely explains why little research is done into its possible therapeutic roles, because without the possibility of future patent protection, pharmaceutical companies rarely fund research on a drug. (Another substance having obvious therapeutic effect but not FDA approved for use as a drug is melatonin.) Also, DMSO is commonly used in the veterinary field as a liniment for horses.

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DMSO is a byproduct of wood processing for papermaking. It is somewhat oily liquid that looks like mineral oil and has a slightly garlicky odor.

Applying DMSO on sprined ankles, pulled muscles, dislocated joints, and even at the site of simple fractures can virtually eliminate the pain. It also promotes immune system activity.

DMSO is absorbed through the skin and enters the bloodstream by osmosis through capillary walls. It is then distributed through the circulatory system, and ultimately is excreted throu the urine.