The primary use of virtualization technology in software testing is to create isolated environments that mimic production settings. This allows developers and testers to run applications on virtual machines without conflicts with other systems. Virtualization enables easier resource allocation, as multiple virtual instances can run on a single physical server, which optimizes hardware usage. Furthermore, it facilitates testing under various configurations and environments, thus improving software quality by enabling regression testing and compatibility checks, while also reducing costs and setup times needed for physical testing environments.