Thiazolidione, conferring drug-like properties, is an important heterocycle that widely exists in medicinally relevant molecules. In this work, by efficiently assembling various DNA-tagged primary amines, abundant aryl isothiocyanates, and ethyl bromoacetate, we present a DNA-compatible three-component annulation to generate a 2-iminothiazolidin-4-one scaffold, which was further decorated via Knoevenagel condensation by employing (hetero)aryl and alkyl aldehydes. These thiazolidione derivatives should find broad use in focused DNA-encoded library construction.