Condensation of 4-amino-2,3-dimethyl-1-phenyl-3-pyrazoline-5-one with different aromatic and heterocyclic aldehydes in dry toluene give schiff bases 3(a-g), which on reaction with thioglycolic acid and thiolactic acid in dry toluene give the corresponding 2,3-disubstituted-4-thiazolidinones 4(a-g) and 2,3-disubstituted-5-methyl-4- thiazolidinones 5(a-g). The methylene carbon atom at the position 5 of 4-thiazolidinone possesses nucleophilic activity. The Knoevenagel reaction of methylene group of 4-thiazolidinone has been widely attempted. Further 2,3- disubstituted-4-thiazolidinones 4(a-g) on condensation with 4-methoxybenzaldehyde (Knoevenagel reaction) in alcohol in the presence of sodium- ethoxide give its corresponding 2,3-disubstituted-5-arylidene 6(a-g) derivatives. Structures of newly synthesised compounds were established on the basis of their elemental analysis, IR and 1H NMR spectral data. Antibacterial activity (minimum inhibitory concentration MIC) against Gram-positive (S. aureus MTCC 96 and S. pyogeneus MTCC 442 ) and Gram-negative (P. aeruginosa MTCC 1688 and E. coli MTCC 443) bacteria, as well as antifungal activity (MIC) against C. albicans MTCC 227, A. niger MTCC 282 and A. clavatus MTCC 1323 were determined by broth dilution method.