Ethyl acetoacetate (I) was stirred with hydrazine hydrate in ethanol to get 5-methyl-2,4-dihydro-3H-pyrazol-3-one (II). This was refluxed with different aryl aldehydes in gl acetic acid in presence of fused sodium acetate to get corresponding (4Z)-4-arylidene-5-methyl-2,4-dihydro-3H-pyrazol-3-ones (IIIa-f). These III were treated with 2,4-dinitrophenylhydrazine to get a series of 4,5-disubtituted 3-methyl-1, 3a,4,5-tetrahydropyrazolo [3,4-c] pyrazoles. The structures of the compounds have been established based on their analytical and spectral data. All the compounds have been screened for their antiinflammatory activity. Compound IVb and IVd exhibited good antiinflammatory activity.