Aurones constitute a less studied sub-class of flavonoides which occur rarely in nature. Aurones are responsible for the golden yellow colour of some flowers. Substituted 2-benzylidene-1-benzofuran-3 (2H)ones are commonly known as aurones that belong to the naturally occurring flavonoids. In the present investigation, a series of some novel substituted 2benzylidene-1-benzofuran-3 (2H)-ones (2a-j) have been synthesized by cyclization of 1-(substituted-2-hydroxy-phenyl)-3-(4'-dimethylaminophenyl)-prop-2-en-1-one (2-hydroxychalcone) (1a-j) with mercuric acetate in DMSO. The products were tested for purity by TLC and structures of newly synthesized compounds were confirmed by physical data, IR, 1 H NMR and Mass spectral analysis. All these newly synthesized compounds were evaluated for their antibacterial activity against four different pathogens such as Escherichia coli, Salmonella typhi, Staphylococcus aureus and Bacillus subtilis and antifungal activity against Aspergillus niger, Penicillium chrysogenum, Fusarium moneliforme and Aspergillus flavus, using Peniciline and Greseofulvin as standard drugs by agar cup method and Poison plate method, respectively.