Several new flavones/flavanones and 5'-substituted-2'-hydroxy chalcones have been synthesised through Claisen Schmidt condensation. 5-Chloromethyl-2- hydroxy acetophenone 1 on condensation with various aromatic aldehydes yields chalcones 2a and 2b, which on cyclisation in presence of SeO 2 give corresponding flavones 2c and 2d respectively. Compound 3 is obtained from 1 by reacting with o-toluidine. Further condensation of 3 with different aromatic aldehydes gives the corresponding chalcone/flavone derivatives 3a-e. The synthesised flavonoid derivatives are evaluated for their antiinflammatory activity on carrageenan induced paw edema in rats and in vitro antibacterial activity. The results have been encouraging.