A new series of 3-aryl-2-(2-aryl/benzyl-4-methylthiazole-5-yl)thiazolidin-4-one was synthesized by condensation of 2-aryl/benzyl-4-methylthiazole-5-carbaldehyde, aromatic amines and thioglycolic acid in toluene. All the synthesized compounds are characterized by IR, NMR and elemental or mass analysis. Sixteen out of the newly synthesized compounds were screened for in vivo anti-inflammatory activity using carrageenan-induced rat paw edema method. Some of the synthesized compounds exhibited good anti-inflammatory activity compared with indomethacin. The synthesized compounds were also evaluated for their in vitro antimicrobial activity. Some of the compounds showed mild antibacterial activity while most of the compounds showed good antifungal activity.