An improved and economically affordable synthesis of (S)-4-benzyl-2-oxazolidinone from amino acid has been demonstrated. One pot reaction of phenylalanine with thionyl chloride and sodium borohydride in aqueous methanolic solution yielded phenyl alaninol quantitatively. Success of the reaction depends on the initial formation of smaller particles of the reactants under reaction conditions which became homogenous after some time and finally phenyl alanilol separated out from the solution. The cyclilization of the amino alcohol to oxazolidinone was achieved with diethyl carbonate and potassium carbonate in excellent yield in absence of any solvent. The heterogeneous reaction mixture slowly turned into the desired product during the reaction. Methanol and excess diethyl carbonate were recycled.