In an attempt to find a new class of antimicrobial agents, a series of novel azetidin‐2‐ones 3a–e and thiazolidin‐4‐ones 4a–e of 2‐amino‐5‐cyclopropyl‐1,3,4‐thiadiazole were synthesized. The synthesized compounds were confirmed by melting point, IR, 1H NMR, 13C NMR, and mass spectroscopy. The β‐lactam derivative (3e) was found to be the most potent compound of the series displaying excellent antibacterial activities against Staphylococcus aureus, Bacillus subtilis, Escherichia coli, and Pseudomonas aeruginosa with MIC values of 15.60, 31.50, 62.50, and 125 µg/mL, respectively, as compared to the positive control drug ampicillin. Molecular docking studies and determination of the leakage of UV260‐ and UV280‐absorbing material (nucleic acid material and protein) confirmed that the synthesized compounds inhibit cell wall synthesis by inhibiting PTB (transpeptidase enzyme). Lipinski's rule and in silico ADME pharmacokinetic parameters are within the acceptable range defined for human use, thereby indicating their potential as a drug‐like molecules.