An improved method for preparation of urea stibamine was developed. The crude p-acetylaminophenyl stibonic acid (II) prepared was purified by dissolving it in Na2CO3 solution, whererin acid (II) dissolved leaving behind the impurities. Acid (II) was directly combined with urea without hydrolyzing the acetyl group to give urea stibamine. Biological activity of the drug in vitro as well as in vivo was also studied. The drug had no inhibitory effect on growth, respiration, incorporation of radiolabeled precursors into promastigotes of L. donovani, and on transformation of amastigotes to promastigotes. In infected hamster, the effect of the drug was highly significant in vivo., as it removed the parasitic burden completely.