Synthesis and biological evaluation of various aroylpropionic acid derivatives containing 1,3,4-Oxadiazole nucleus is reported here. The compounds (3a-w) were synthesized by cyclization of 3-aroylpropionic acids into 1,3,4-oxadiazole nucleus by treating with various aryl acid hydrazides in the presence of POCl(3). The structures of new compounds are supported by IR, (1)H NMR and MS data. These compounds were tested in vivo for their anti-inflammatory activity. All the compounds tested showed anti-inflammatory activity. The compounds which showed activity comparable to the standard drug ibuprofen were screened for their analgesic, ulcerogenic and lipid peroxidation activities. Seven (3c, g, i, j, m, o, p) out of 23 new compounds showed very good anti-inflammatory activity in the carrageenan-induced rat paw edema test with very less ulcerogenic action. The compounds, which showed less ulcerogenic action, also showed reduced malondialdehyde production (MDA), which is one of the byproducts of lipid peroxidation. Compound 3i and o showed 89.50 and 88.88% of inhibition in paw edema, 69.80 and 66.25% protection against acetic acid induced writhings and 0.7 and 0.65 of severity index respectively, compared to 90.12, 72.50 and 1.95 values of ibuprofen. The study showed that the cyclization of carboxylic group of aroylpropionic acids into an oxadiazole nucleus resulted in compounds having good anti-inflammatory and analgesic effects with reduced gastric irritation.