[15] Industrially, it is produced by the reaction of molten cadmium and chlorine gas at 600 °C.

[14] The monohydrate, hemipentahydrate, and tetrahydrate can be produced by evaporation of the solution of cadmium chloride at 35, 20, and 0 °C respectively.

[14] In the laboratory, anhydrous CdCl2 can be used for the preparation of organocadmium compounds of the type R2Cd, where R is an aryl or a primary alkyl.

These were once used in the synthesis of ketones from acyl chlorides:[16] Such reagents have largely been supplanted by organocopper compounds, which are much less toxic.

Like all cadmium compounds, CdCl2 is highly toxic and appropriate safety precautions must be taken when handling it.