2-Aminobenzothiazole-6-carboxylic acid (1), on condensation with chloroacetyl chloride yielded 2-(2-chloroacetylamino)benzothiazole-6-carboxylic acid (2), which on amination with hydrazine hydrate yielded in turn 2-(2-hydrazinoacetylamino)benzo-thiazole-6-carboxylic acid (3). Compound 3, on condensation with various aromatic aldehydes afforded a series of 2-{2-[N'-(arylidene)hydrazino]acetylamino}benzothiazole-6-carboxylic acids 4a-h, which upon dehydrative annulation in the presence of chloroacetyl chloride and triethylamine yielded 2-{2-[3-chloro-2-(aryl)-4-oxoazetidin-1-ylamino]-acetylamino}benzothiazole-6-carboxylic acids 5a-h. The synthesized compounds 4a-h and 5a-h were screened for their antibacterial activity against four microorganisms: Staphylococcus aureus (Gram positive), Bacillus subtilis (Gram positive), Psuedomonas aeruginosa (Gram negative) and Escherichia coli (Gram negative). They were found to exhibit good to moderate antibacterial activity. The antifungal activity of these compounds were also tested against three different fungal species. None of them were active against the species tested.