The practice of medicinal chemistry is devoted to the discovery and development of new agents for treating disease. A new derivative of methyl 2-((E)-3-(3,4 dihydroxyphenyl)acrylamido)benzoate 2 was synthesized by reacting the amino group of methyl anthranilate 1 with caffeic acid in the presence of PCl3. Cyclcondensation of 2 with hydrazine hydrate afforded the corresponding 2,3-dihydro-2-(3,4-dihydroxyphenyl) pyrazolo[5,1-b]quinazolin-9(1H)-one 3. The median lethal doses (LD50s) of compounds 2 and 3 in mice were 1,135 and 495 mg/kg b.w., respectively. The anti-inflammatory, reducing power, chelating activity on Fe2?, free radical-scavenging, and total antioxidant activities were more pronounced in compound 2 compared to compound 3. On the other hand, antipyretic activity was more pronounced in compound 3 compared to compound 2. Antioxidant activity of compounds 2 and 3 increased with increased concentrations. Total antioxidant activity of compounds 2, 3 and both standards decreased in the order of a-tocopherol [ compound 2[trolox[BHA [BHT [compound 3. Administration of compounds 2 and 3 orally to the rats at dose of 50, 100, and 150 mg/kg b.w., for 10 days showed non-significant changes in serum level of GOT, GPT, ALP, c-GT, and LDH as compared with the control group. In addition, oral administration of the compound 2 at a concentration of 100 and 150 mg/kg b.w. and compound 3 at a concentration of 150 mg/kg b.w. daily to normal rats for 10 days showed a significant increase in liver GSH, GPx,GR, and GST activities and significant decrease in TBARS level. But, administration of diclofenac sodium (30 mg/kg b.w.) orally to the rats daily for 10 days to rats showed significant increase in serum SGOT, SGPT, ALP, c-GT, and LDH and significant decrease in liver GSH, GPx, GR, and GST activities. These findings suggest that compounds 2 and 3 exhibited good antioxidant and anti-inflammatory activity and also showed effects on liver enzymes.