The acid hydrazide (I & IV) on condensation with different aromatic aldehydes yielded the substituted benzal hydrazines (IIa-e & Va-e) which on cyclization with thioglycolic acid in presence of anhydrous aluminium chloride as catalyst afforded 2-(substituted phenyl)-5-Hthiazolidin- 4-ones (IIIa-e & VIa-e). The structures of the newly synthesized compounds have been confirmed by IR, 1HNMR and Mass spectra. The compounds have also been screened for their biological activity.