The synthesis of novel heterocyclic compounds2a-d have been carried out by the [2+2]cyloaddition of chloroketene to 3,4-dihydropyrimidone, 1a-d. 3a & 3b are synthesised by the [2+2] cycloaddition of dichloroketene to the dihydropyrimidone1a&1c respectively. The structures of these compounds have been confirmed on the basis of their elemental analysis and spectral data. The synthesised compounds 2a-d and 3a&3b were screened for their antimicrobial activity. They have been tested for antibacterial activity against Escherichia coli, Staphylococcus aureus, Shigella boydii, Aeromonas spp and Bacillus. subtilis and for antifungal activity against Aspergillus flavus, Aspergillus niger, Fusarium spp , Trichophyton mentagrophytes and Penicillium spp. The compounds 2b & 3b were screened for their cytotoxic activity on Hep2 Cell line