The hatchet can be used to harvest sticks from branches, cedar firewood from cedar limbs and fir firewood from fir limbs. It can also be used to break down many wooden objects such as shelves and crates into reclaimed wood. It is also one of two items (the other being the hacksaw) necessary to cut down maple and birch saplings.
The hatchet can be used to harvest animal carcasses. The hunting knife is usually the most effective at this, but sometimes the hatchet is more effective. When the animal corpse is 100% frozen harvesting meat with the hatchet is faster.
The hatchet can currently only be repaired using a whetstone as part of the bladed tool maintenance gameplay mechanic and requires no material input. However the whetstone itself cannot be repaired and loses 5% condition per repair (for a total of 20 uses), compared to 3% or so of hatchet condition restored. It is not a permanent solution and at some point a hand-made alternative will be needed.