Abstract The C-acylation reactions of the active methylene compounds, methyl cyanoacetate and Meldrum's acid, with hippuric acid, using the DCC activation and the mixed anhydride conditions, are shown to proceed through initial formation of 2-phenyl-5 (4H)-oxazolone, the hippuric acid azlactone. The conditions of these reactions using the azlactone as the acylating agent were investigated and discussed.