The switchable roles of allylic alcohol and molecular iodine as reagents and catalysts have been demonstrated in the regioselective allylic alkylation and iodination of imidazoheterocycles employing the mixture of allylic alcohol-I2. First, we have explored the catalytic activity of iodine for the allylation of imidazoheterocycles using allylic alcohol in an aqueous medium. The allylation of a library of imidazoheterocycles and other electron-rich heterocycles like indole, pyrazole, 4-hydroxy coumarin, and 6-amino uracil has been achieved by employing this methodology. The efficiency of the I2 catalyst for N-allylation of azoles has also been demonstrated. Next, we have shown that this mixture of allylic alcohol and I2 could be beneficial for the iodination of imidazoheterocycles under room temperature. Mechanistic studies indicate that the activation of allylic alcohol by molecular iodine took place probably through halogen bonding, and NMR studies show that the reaction did not proceed through allylic ether formation.