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Ten new derivatives of 1-benzothiazol-2-yl-3-chloro-4-substituted-azetidin-2-ones (3a-j) were synthesized using various Schiff bases (alkyl/arylidene-2-aminobenzothiazoles; 2a-j), which in turn were prepared starting from 2-aminobenzothiazole (1). All the synthesised compounds were characterised by elemental analyses and spectral (IR, 1H-NMR, 13C-NMR and EI-MS) data. The title compounds 2a-j and 3a-j were screened in vivo using carrageenan-induced rat paw edema model. All the test compounds showed anti-inflammatory activity when tested in vivo. In general, compounds 3a-j were found to be more potent compared to compounds 2a-j. Among the compounds tested, compound 2g in the alkyl/arylidene-2-aminobenzothiazoles series and compound 3 g in the 1-benzothiazol-2-yl-3-chloro-4-substituted-azetidin-2-ones series were found to be the most potent. All the test compounds were also evaluated to check the gastric ulcer incidence. In gastric ulceration studies, all the test compounds were generally found to be safe at the 100 mg/kg dose level. Furthermore the most potent compounds 2 g and 3 g from each series were screened in vitro for inhibition of both COX-2 and COX-1 catalysed prostaglandin biosynthesis (radiochemical assay). Like most of the commercially available non-steroidal anti-inflammatory drugs (NSAIDs), in the in vitro study, compounds 2 g and 3 g showed anti-inflammatory activity by blocking the metabolism of arachidonic acid to prostaglandin via the cyclooxygenase pathways. In general, in the vitro assay, test compounds 2 g and 3 g were found to be more active after 15 min pre-incubation with the enzyme. Compound 3 g was found to be more COX-2 selective, while compound 2 g was found to be equally COX-2 and COX-1 selective.