This research includes synthesis of new heterocyclic derivatives of disubstituted 1,3-oxazepine-5-one. Azomethine compounds (N1-N5) were synthesized by the reaction of aromatic aldehydes with primary aromatic amines, in the presence of glacial acetic acid as a catalyst in absolute ethanol. The synthesized compounds were identified via spectral methods viz., FT-IR, 1H-NMR, and 13C-NMR and measurements of some physical properties. The prepared oxazepine compounds (N6-N10) were obtained from treatment of azomethine compounds with phthalide. N9 and N7 derivatives have recorded the higher zone of inhibition 15 mm against Candida guilliermondii and Candida zeylanoides respectively. The lower zone of inhibition was 8.0 mm and 9.3 mm by N7 toward the growth of Candida albicans and Candida guilliermondii respectively. Slight variation in the structure of those derivatives can show the very dramatic effect on the efficiency of these compounds in their bio-activity and may be helpful in designing more antifungal agents for therapeutic use in future.