An expeditious method for preparation of 2-Azetidinones under microwave irradiation is developed. This method has been assessed as greener methodology and found superior to conventional method with higher environmental factor. A series of five novel azetidinones were synthesized by cyclocondensation of various Schiff bases of 2 – α(phenylacetyl) benzohydrazide with chloroacetylchloride in the presence of triethylamine. Schiff’s bases preparing from 3-benzylidene phthalide moiety with different aromatic aldehydes under microwave irradiation in DMSO solvent and cyclocondensation of Schiff’s bases with chloracetyl chloride in the presence of triethylamine and DMF under microwave irradiation resulted in the formation of corresponding azetidinone derivatives. The newly synthesized compounds were characterized by IR, 1H-NMR spectra. The synthesized compounds were evaluated for antibacterial and antifungal activities by Broth dilution method. All the compounds were screened for their antibacterial activity against Staphylococcus aureus, Bacillus subtilis (Gram positive bacteria) Escherichia coli, Pseudomonas aeruginosa (Gram-negative bacteria). Compounds showed good anti-bacterial activity against Staphylococcus aureus and Bacillus subtilis.