It has been used in organic chemistry as a precursor for cyclobutadiene, which is an elusive species in the free state.

[1] Cyclobutadieneiron tricarbonyl was first prepared in 1965 by Pettit from 3,4-dichlorocyclobutene and diiron nonacarbonyl:[2][3] The compound is an example of a piano stool complex.

[4] Oxidative decomplexation of cyclobutadiene is achieved by treating the tricarbonyl complex with ceric ammonium nitrate.

[5] Cyclobutadieneiron tricarbonyl displays aromaticity as evidenced by some of its reactions, which can be classified as electrophilic aromatic substitution:[6] It undergoes Friedel-Crafts acylation with acetyl chloride and aluminium chloride to give the acyl derivative 2, with formaldehyde and hydrochloric acid to the chloromethyl derivative 3, in a Vilsmeier-Haack reaction with N-methylformanilide and phosphorus oxychloride to the formyl 4, and in a Mannich reaction to amine derivative 5.

In 1956, Longuet-Higgins and Orgel[8] predicted the existence of transition-metal cyclobutadiene complexes, in which the degenerate eg orbital of cyclobutadiene has the correct symmetry for π interaction with the dxz and dyz orbitals of the proper metal.