Treatment of 4-aminobenzoyl hydrazide (1) with (CS2) and potassium hydroxide in absolute (EtOH) resulted in formation of 5-(4-aminophenyl)-2-thiol-1,3,4-oxadiazole (2). Compound (2) has been converted to the diazonium salt which reacted with 2-hydroxybenzaldehyde for producing the aldehyde derivative (3). Reaction of compound (3) with (4-nitroaniline, 3-nitroaniline, 2-nitroaniline, 4-chloroaniline, 2-chloroaniline, 2,4-dichloroaniline and 4-bromoaniline) by (MW) method in (EtOH) afforded seven Schiff bases (4a–g). Cycloaddition of imines (4a–g) with phthalic anhydride in microwave oven gave seven 1,3-benzoxazepine-1,5-diones (5a–g) bearing oxadiazole moiety. Screening verves of final benzoxazepines was done on Staphylococcus aurous and Escherichia coli. The implications explained that compounds (5b, 5c, 5d, 5e, 5f and 5g) possess higher effect than gentamycin against Staphylococcus aurous. Moreover, the 1,3-oxazepine-1,5-diones (compounds 5a, 5b, 5c, 5d, and 5g) appeared better action against Escherichia coli comparably with the standard antibiotic.