[3] DPPA undergoes pseudohalogen replacement of the azido group by treatment with nucleophilic reagents, such as ammonia and various amines.

[citation needed] This compound is used as a reagent for the synthesis of peptides by virtue of its reactions with carboxylic acids leading to either the urethane or the amide.

It is now suggested that this reaction proceeds through the intermediate mixed anhydride, resulting from attack by the nucleophilic carboxylate anion on the phosphorus atom, with expulsion of the azide ion.

The latter then attacks the carbonyl carbon atom, to give the acyl azide and loss of the diphenylphosphate anion, known to be a good leaving group.

In the synthesis of NSAIDs, DPPA is able to rearrange a propanoyl group into an isopropanoic acid.