In the solid state, 1,3-indandione occurs as a diketone; in water, it is partially (~2%) enolized. The enolate anion exhibits significant delocalization, and the highest electron density is on the second carbon. This explains many of chemical properties of the compound.
Certain derivatives are used in human medicine. Some other ones could be promising materials in the photonics field.
In addition, 1,3-indandione ("indanedione") is used in the first stage of forensic identification of latent finerprints. It is particularly useful for paper, and for items printed with thermal inks such as receipts. Amino acids left behind by the human hand may be developed into fingerprints by the use of it; the results, photographed with a special filter under a strong yellow-green fluorescent or green laser. It is usually the first method employed in a sequential analysis aimed at the production of evidence of a grade suitable for use in the courtroom.