An efficient synthesis of 3-amino-2-formyl-functionalized benzothiophenes by a domino reaction protocol and their use to synthesize a library of novel scaffolds have been reported. Reactions of ketones and 1,3-diones with these amino aldehyde derivatives formed a series of benzothieno[3,2-b]pyridine and 3,4-dihydro-2H-benzothiopheno[3,2-b]quinolin-1-one, respectively. A plausible mechanism for the formation of fused pyridine derivatives by the Friedlander reaction has been elucidated by density functional theory (DFT) calculations. Furthermore, hydrazones were obtained by reacting the aldehyde functional group of benzothiophenes with different hydrazine derivatives. Preliminary screening of these compounds against several bacterial strains and cancer cell lines led to the discovery of several hit molecules. Hydrazone and benzothieno[3,2-b]pyridine derivatives are potent cytotoxic and antibacterial agents, respectively. One of the potent compounds effected ∼97% growth inhibition of the LOX IMVI cell line at 10 μM concentration.