Novel xanthine and imidazolone derivatives were synthesized based on oxazolone derivatives 2a-c as a key intermediate. The corresponding xanthine 3-5 and imidazolone derivatives 6-13 were obtained via reaction of oxazolone derivative 2a-c with 5,6-diaminouracils 1a-e under various conditions. Xanthine compounds 3-5 were obtained by cyclocondensation of 5,6-diaminouracils 1a-c with different oxazolones in glacial acetic acid. Moreover, 5, 6-diaminouracils 1a-e were reacted with oxazolones 2a-c in presence of drops of acetic acid under fused condition yielding the imidazolone derivatives 6-13. Furthermore, Schiff base of compounds 14-16 were obtained by condensing 5, 6-diaminouracils 1a,b,e with 4-dimethylaminobenzaldehyde in acetic acid. The structural identity of the resulting compounds was resolved by IR, 1H-, 13C-NMR and Mass spectral analyses. The novel synthesized compounds were screened for their antifungal and antibacterial activities. Compounds 3, 6, 13 and 16 displayed the highest activity against Escherichia coli as revealed from the IC50 values (1.8–1.9 µg/mL). The compound 16 displayed a significant antifungal activity against Candia albicans (0.82 µg/mL), Aspergillus flavus (1.2 µg/mL) comparing to authentic antibiotics. From the TEM microgram, the compounds 3, 12, 13 and 16 exhibited a strong deformation to the cellular entities, by interfering with the cell membrane components, causing cytosol leakage, cellular shrinkage and irregularity to the cell shape. In addition, docking study for the most promising antimicrobial tested compounds depicted high binding affinity against acyl carrier protein domain from a fungal type I polyketide synthase (ACP), and Baumannii penicillin- binding protein (PBP). Moreover, compound 12 showed high drug- likeness, and excellent pharmacokinetics, which needs to be in focus for further antimicrobial drug development. The most promising antimicrobial compounds underwent theoretical investigation using DFT calculation.