A series of novel oxazole derivatives (A, A1, A2) were synthesized starting from acetone and urea. The compound (A) was obtained by heating it with acetophenone and urea in iodine. Compound (A) on treatment with 4-amino benzaldehyde (Z)-N-(4-amino benzylidine)-4-((E)-Penta-2, 4-diene-2) oxazole-2-amine afforded (A1). Acylation of compound (A) with 4-amino benzoyl chloride to obtain the corresponding N-(4 phenyl oxazole-2- yl)- benzamide (A2). The structures of compounds have been established employing FTIR and 1H-NMR spectral analysis. All oxazole derivatives were evaluated for anti-inflammatory activity by the carrageenan-induced Rat hind paw method. Derivative A1 shows maximum anti-inflammatory activity. Keywords: Oxazoles, anti-inflammatory, Benzamide, acetophenone, indomethacin.