Alkylation of 2-(p-hydroxyphenyl)-1,8-naphthyridine 1 with ethyl chloroacetate in DMF in the presence of anhyd. K2CO3 under microwave irradiation gives ethyl [p-(1,8-naphthyridin-2-yl) phenoxy]-acetate 2, which on hydrazinolysis yields [p-(1,8-naphthyridin-2-yl) phenoxy] acetic acid hydrazide 3. The hydrazide 3 on condensation with aromatic aldehydes in DMF under microwave irradiation affords [p-(1,8-naphthyridin-2-yl) phenoxy] acetic acid arylidene-hydrazides 4, which on oxidative cyclization with chloramine-T in ethanol under microwave irradiation results in the formation of 5-aryl-2-[p-1,8-naphthyridin-2-yl) phenoxymethyl]-1,3,4-oxadiazoles 5. The reaction rate is enhanced tremendously under microwave irradiation as compared to conventional method with improved yields. The structures of the compounds 2-5 have been established on the basis of their elemental analyses and spectral (IR, H-1 NMR and MS) data.