It acts as a catalyst in electrophilic aromatic substitution reactions such as aromatic halogenation and Friedel-Crafts acylation and alkylation reactions.
Electrophilic aromatic substitutions
#"AlCl"_3# coordinates to halogens and facilitates the breaking of the halogen #"X-X"# bonds.
#"Cl-Cl:" + "AlCl"_3 → ["Cl-" stackrelcolor(blue)(+)("Cl")"-" stackrelcolor(blue)("-")("Al")"Cl"_3 ⟷ "Cl"^"+" + "Cl-"stackrelcolor(blue)("-")("Al")"Cl"_3]#
Thus, the #"AlCl"_3# makes the halogen more electrophilic and therefore more reactive.
Friedel-Crafts acylation and alkylation
In these reactions, the #"AlCl"_3# promotes the formation of carbocations.
(a) Acylation
#"R(C=O)-Cl:" + "AlCl"_3 → ["R(C=O)-" stackrelcolor(blue)(+)("Cl")"-" stackrelcolor(blue)("-")("Al")"Cl"_3 ⟷ "R"stackrelcolor(blue)("+")("C")"=O" + "Cl-"stackrelcolor(blue)("-")("Al")"Cl"_3]#
(b) Alkykation
#"RCH"_2"-Cl:" + "AlCl"_3 → ["RCH"_2"-"stackrelcolor(blue)(+)("Cl")"-" stackrelcolor(blue)("-")("Al")"Cl"_3 ⟷ "R"stackrelcolor(blue)("+")("C")"H"_2 + "Cl-"stackrelcolor(blue)("-")("Al")"Cl"_3]#