A series of novel substituted 3-acetyl-1-(benzylideneamino) quinolin-2(1H)-one (1-12) have been synthesized by condensing different substituted 3-acetyl-1-aminoquinolin- 2-one and aromatic aldehydes in alcohol medium. 3-acetyl-1-aminoquinolin- 2-one were synthesized from substituted 3-acetyl coumarin upon refluxing with hydrazine hydrate and ethanol. The structures of the final synthesized compounds were confirmed by IR, 1H NMR and mass spectra. The synthesized compounds were screened for their antimicrobial activity against Bacillus subtilis, Staphylococcus aureus, Escherichia coli, Pseudomonas aeruginosa and Candida albicans, Aspergillus niger respectively by tube dilution method. Most of the compounds showed good minimum inhibitory concentration compared to the standard drug amoxicillin and fluconazole respectively. Anti-inflammatory studies were carried out by carrageenan induced paw edema method. Anti-inflammatory studies showed statistically significant activity when compared to control.