A series of 2-((4-acetyl-5-(aryl)-5-methyl-4,5-dihydro-1,3,4-oxadiazol-2-yl) methylthio)-3-o-tolylquinazolin-4(3H)-one 5 was synthesized by the cyclization of imines 4 using acetic anhydride. The Schiff's base 4 are obtained by the reaction of appropriate carbonyl compound with 2-(4-oxo-3-o-tolyl-3,4-dihydroquinazolin-2-ylthio) acetohydrazide 3. The products are characterized by spectral and analytical data. The synthesized compounds 5a-h were screened for their antibacterial and antifungal activity.