Milnor K-theory gives a way to compute étale cohomology of fields (i.e. Galois cohomology): if E is a field of characteristic different from a prime l, there is a residue map from the nth Milnor K-group of E mod l to the nth étale cohomology group of E with coefficients in the sheaf of lth roots of unity to the n (i.e. tensored with itself n times). There is the Bloch-Kato conjecture, which predicts that these residue maps are bijective. It happens that the case l=2 was conjectured by Milnor (up to a reformulation I guess). The Milnor conjecture has been proved by Voevodsky (and it was the first great achievements of homotopy theory of schemes, which he initiated with Morel during the 90’s), and he got his Fields medal in 2002 for this. Now Rost? and Voevodsky claimed they have a proof of the full Bloch-Kato conjecture for any prime l (which should appear some day, thanks to the work of quite a few people, among which Charles Weibel is not the least). Note also that the Bloch-Kato conjecture makes sense for l=p=char(E), but then, you have to replace étale cohomology by de Rham-Witt cohomology? (and this has also been proved by Bloch and Kato). Suslin and Voevodsky also proved that the Bloch-Kato conjecture implies the Beilinson-Lichtenbaum conjecture?, which predicts the precise relationship between torsion motivic cohomology of varieties with torsion étale cohomology.

Milnor K-theory is related to motivic cohomology (i.e. higher Chow groups) in degree n and weight n H^n(X,Z(n)): for X=Spec(E), H^n(X,Z(n)) is the nth Milnor K-group. This is how homotopy theory of schemes enters in the picture (one of the main feature introduced by Voevodsky to study motivic cohomology with finite coefficients is the theory of motivic Steenrod operations?). On the other hand, Rost studied Milnor K-theory for itself: among a lot of other things, he proved that, if you consider it as a functor from the category of fields, with all its extra structures (residue maps interacting well), you can reconstruct higher Chow groups of schemes (over a field), via some Gersten complex.

Milnor K-theory is also a crucial ingredient in Kato’s higher class field theory?.