A series of 3-arylidene-5-(4-chloro-phenyl)-2(3H)-furanones (2-13) and their nitrogen analogues 1-benzylpyrrolones (14-18) were synthesized. The compounds were evaluated for their anti-inflammatory, analgesic, ulcerogenic and lipid peroxidation actions. Some of the newly synthesized compounds showed good anti-inflammatory and analgesic activities with low GI toxicity and reduced lipid peroxidation. The biological activity was found to improve upon replacement of oxygen of furanone ring with benzylamine moiety i.e. 1-benzylpyrrolones. Similarly, compounds containing halogen group(s), compounds 15 and 17, showed higher degree of anti-inflammatory activity and their activity was comparable to that of the standard. These compounds showed interesting profile of analgesic activity in acetic acid induced writhing test (peripheral effect) and in the hot-plate test (central effect). The compounds were also tested for their ulcerogenic and lipid peroxidation action and showed superior GI safety profile along with reduction in lipid peroxidation as compared to that of the standard.