A convenient and efficient new method has been established for the synthesis of dihydropyrimidines by inexpensive and non-toxic N-acetyl glycine (NAG) catalysed reaction of aromatic aldehydes with ethyl acetoacetate and urea/thiourea. This method is applicable for various substituted aldehydes as well as urea and thiourea. It has also been used to synthesize bicyclic oxygen-bridged pyrimidine derivatives