The present study deals with the synthesis of novel spiroazetidine-2,3′-indole-2′,4(1′H)-dione derivative from the reactions of 3-(phenylimino)-1,3-dihydro-2H-indol-2-one derivatives with chloracetyl ...chloride in the presence of triethylamine (TEA). All the compounds were characterized using IR,
1
H-NMR, MS, and elemental analysis. They were screened for their antibacterial and antifungal activities. The bacterial strains used were Gram-positive
Staphylococcus aureus
(MTCC-96) and Gram-negative
Escherichia coli
(MTCC-521) and
Pseudomonas aeruginosa
(MTCC-647). The antifungal screening was done on
Candida albicans
(MTCC-183) and
Asperigillus niger
(MTCC-343) fungal strains. Results revealed that, compounds (
7a
), (
7b
), (
7c
), (
7d
), and (
7e
) showed very good activity with MIC value of 6.25–12.5 μg/ml against three evaluated bacterial strains and the remaining compounds showed good to moderate activity comparable to standard drugs as antibacterial agents. Compounds (
7c
) and (
7h
) displayed equipotent antifungal activity in comparison to standard drugs. Amoxicillin, gentamycin, and streptomycin were used as standard drugs for antibacterial activity while fluconazole and itraconazole were used as standard drugs for antifungal activity. Structure–activity relationship study of the compounds showed that the presence of electron withdrawing group substitution at 5′ and 7′ positions of indoline ring and on
ortho
or
para
position of phenyl ring increases both antibacterial and antifungal activity of the compound. Henceforth, our findings will have a good impact on chemists and biochemists for further investigations in search of spiro-fused antimicrobial agents.