An efficient procedure for the preparation of 7,8-dichloro-6-nitro-1H-1,5-benzodiazepine-2,4-(3H, 5H)-dione(7) as a potential lead compound for the NMDA receptor glycine binding site antagonist, starting from readily available 4,5-dichloro-2-nitroaniline(8), is described. The key step in the synthesis involves the cyclization of malonic ester amide 10 to compound 11.