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Two novel heterocyclic ligands, 2‐[(5‐fluoro‐1,3‐benzothiazol‐2‐yl)amino]naphthalene‐1,4‐dione (HL1) and 2‐[(5‐methyl‐1,3‐benzothiazol‐2‐yl)amino]naphthalene‐1,4‐dione (HL2), and their Pd(II), Ni(II) and Co(II) complexes were prepared and characterized using 1H NMR, 13C NMR, infrared and UV–visible spectroscopic techniques, elemental analysis, magnetic susceptibility, thermogravimetry and molar conductance measurements. The infrared spectral data showed that the chelation behaviours of the ligands towards the transition metal ions were through one of the carbonyl oxygen and deprotonated nitrogen atom of the secondary amine group. Molar conductance results confirmed that the complexes are non‐electrolytes in dimethylsulfoxide. The geometries of the complexes were deduced from magnetic susceptibility and UV–visible spectroscopic results. Second‐order perturbation analysis using density functional theory calculation revealed a stronger intermolecular charge transfer between ligand and metal ion in [NiL1(H2O)2(CH3COO‐)] and CoL1 compared to the other complexes. The in vitro antibacterial activity of the compounds against some clinically isolated bacteria strains showed varied activities. [NiL1(H2O)2(CH3COO‐)] exhibited the best antibacterial results with a minimum inhibitory concentration of 50 μg mL−1. The molecular interactions of the compounds with various drug targets of some bacterial organisms were established in a bid to predict the possible mode of antibacterial action of the compounds. The ferrous ion chelating ability of the ligands indicated that HL1 is a better Fe2+ ion chelator, with an IC50 of 29.79 μg mL−1, compared to HL2 which had an IC50 of 98.26 μg mL−1. [ABSTRACT FROM AUTHOR]