[1] The compound is extremely hygroscopic, and can only be stored and handled under carefully dried inert gas or under a high vacuum.

[8] In air it converts into hydrates by absorbing moisture, but these are unstable and more or less rapidly transform into oxide iodides with the evolution of hydrogen: Neodymium(II) iodide is not stoichiometric, and has a formula of closer to NdI1.95.

[1] Under pressure, this transforms into the molybdenum disilicide structure typically seen in intermetallic compound, which is already present under normal conditions in other rare earth diiodides (e.g. praseodymium(II) iodide and lanthanum(II) iodide).

[4] Neodymium(II) iodide reacts with organohalides by extracting the halogen, resulting in dimers, oligomers or reactions with the solvent.

[15] Neodymium(II) iodide can be used as a reducing agent or catalyst[16] in organic chemistry.