Aluminium sulphate as a catalyst in PEG as a reaction solvent is found to be an attractive, environmentally benign and highly efficient catalytic system for the one-pot multicomponent reaction of aromatic aldehyde, β-naphthol and amide to form the corresponding amidoalkyl naphthol. The procedure is simple, rapid and high yielding. Moreover, the catalyst exhibited a remarkable reactivity and is reusable in PEG-400 as a solvent. The Aluminium sulphate in PEG-400 can be reused upto four times without significant loss in yields and selectivity of the product. The remarkable features of this new one pot C-C and C-N bond forming reaction procedure are high conversations, operationally simple and eco-friendly and economically inexpensive method.