Present work describes the synthesis of 6-nitro-4-hydroxy-2-quinolone derivatives by Nitration of 4- hydroxyquinolines Ia,b give 4-hydroxy-6-nitroquinolines IIa,b. Alkaline hydrolysis of IIa,b give 5-nitrosalisylic acid V. Compounds IIa,b reacted by the condensation with substituted aryl aldehyde e.g anisaldehyde and bezaldehyde in ethanol and with thiourea, semicarbazide and urea, to give VIa-d and VIIa-c respectively. The structure of all these newly synthesized compounds are established by elemental analysis, IR, 1H-NMR spectral data. These compounds were evaluated for microbial screening against Gram positive & Gram negative bacteria and fungi strains such as Aspergillus nigar and Aspergillus flavus. Most of these compounds showed moderate to good activity against all the species of bacteria and fungi.