4-Hydroxy- 1-methyl-3-[(2-oxo-1,2-dihydro- 3H-indol-3-ylidine) acetyl-3,4-dihydroquinolin-2(1H)-ones were characterized by means of Chromatographic and IR, 1H NMR and Mass spectral analysis. These compounds were evaluated for anti-inflammatory activity. Compounds IVC (R=5-Br), IVD (R=5-Cl), IVE (R=7-Br) and IVG (R1=7-Cl) were found to be the more active compounds towards carrageen induced rat paw edema model, and antioxidant activity by DPPH method. Compounds IVA (5-H), IVB (5-CH3), IVC (5-Br) and IVD (5-Cl) were found to be the less potent antioxidant compounds when compared to the standard drug ascorbic acid.