S-(3-Alkyl/aryl-2,4-dioxo-1,2,3,4-tetrahydroquinolin-3-yl)thiocarbamates 3 were thermally reacted to form 4-hydroxy-1H-quinolin-2-ones 1. Under the same reaction conditions, 3a-alkyl/aryl-[1,3]thiazolo[5,4-c]quinoline-2,4(3aH,5H)-diones 4 reacted to yield one of two different types of products, depending on the nature of substituent at the 5 position. Substitution with an alkyl or aryl group produced 4-amino-3-alkyl/aryl-1H-quinolin-2-ones 5, whereas the N-5 unsubstituted analogues rearranged to form novel 6H-thiazolo[3,4-c]quinazoline-3,5-diones 6 in high yields. The reaction mechanisms for the above transformations are discussed. All new products were characterized by NMR, MS and IR spectra. The structure of 1-butyl-9-methyl-6H-thiazolo[3,4-c]quinazoline-3,5-dione 6b was confirmed by single-crystal X-ray diffraction analysis.