ortho-, meta- and para-Hydroxymethylaniline methyl ethers 3-5-OMe and acetyl derivatives 3-5-OAc were investigated as potential photocages for alcohols and carboxylic acids, respectively. The measurements of photohydrolysis efficiency showed that the decaging from ortho- and meta-derivatives takes place efficiently in aqueous solution, but not for the para-derivatives. Contrary to previous reports, we show that the meta-derivatives are better photocages for alcohols, whereas ortho-derivatives are better protective groups for carboxylic acids. The observed differences were fully disclosed by mechanistic studies involving fluorescence measurements and laser flash photolysis (LFP). Photoheterolysis for the para-derivatives does not take place, whereas both meta- and ortho-derivatives undergo heterolysis and afford the corresponding carbocations 3-C and 4-C. The ortho-carbocation 4-o-C was detected by LFP in aqueous solution (λmax = 410 nm, τ ≈ 90 μs). Moreover, spectroscopic measurements for the meta-acetyl derivative 3-m-OAC indicated the formation of cation in the excited state. The application of an ortho-aniline derivative as a protective group was demonstrated by synthesizing several derivatives of carboxylic acids. In all cases, the photochemical deprotection was accomplished in high yields (>80%). This mechanistic study fully rationalized the photochemistry of aniline photocages which is important for the design of new photocages and has potential for synthetic, biological, and medicinal applications.