Cost-effective valorization of carbon dioxide into bulk and specialty chemicals using catalysis will be attractive in the foreseeable future. 1,3-Oxazolidin-2-one derivatives are one of the important classes of heterocyclic compounds which have wide applications in pharmaceutical industries due to their biological activities such as antibacterial, antimicrobial, antiseptic. Various synthetic routes are employed to prepare these compounds which include phosgenation, oxidative carbonylation, etc., which make use of polluting chemicals and homogeneous catalysts. The heterogeneous catalytic processes to synthesize these derivatives are quite limited. Thus, developing a green route which is environmental friendly is highly desirable. The current work deals with development of a heterogeneous reusable catalyst and its application to synthesize 1,3-oxazolidin-2-one derivatives using carbon dioxide as a C1 source. The fact that no use of promoter or organic co-catalyst is made in the current process makes the synthesis route more favorable. Pure La–MgO and K–La–MgO with different K loading (1, 3, 5, and 7 wt%) synthesized by combustion route were screened for carbonylation of diethanol amine. 5% K–La–MgO was found to be the best catalyst. The catalyst was well characterized in virgin form and after use by various analytical techniques like TEM, SEM, XRD, CO2 and NH3-TPD, BET surface area analysis. With 5% K–La/MgO, 72% conversion of diethanol amine was achieved with 100% selectivity of the desired product at optimum conditions, i.e., 150 °C, 5 wt% K–La/MgO catalyst loading of 0.02 g/cm3 and 2.0 MPa CO2 pressure. Reaction mechanism was proposed and kinetic model developed. The apparent activation energy was calculated as 18.76 kcal/mol. The catalyst was robust and recyclable. The process is clean and green.