5-Hydroxy-7-methyl-3H-thiazolo[4,5-b]pyridin-2-one was obtained by the reaction of 4-iminothiazolidin-2-one with acetoacetic ester. Further structural modifications include the introduction of diversity at the C5 and C6 positions. The anti-inflammatory action of novel thiazolo[4,5-b]pyridine-2-one derivatives was evaluated in vivo employing the carrageenan- induced rat paw edema method. The antioxidant activity of the synthesized compounds was evaluated in vitro by the method of scavenging effect on 2,2-diphenyl-1-picrylhydrazyl (DPPH) radicals.