2,3-Dihydroquinazolin-4-one (DHQ) belongs to the class of nitrogen-containing heterocyclic compounds representing a core structural component in various biologically active compounds. In the past decades, several methodologies have been developed for the synthesis of the DHQ framework, especially the 2-substituted derivatives. Unfortunately, multistep syntheses, harsh reaction conditions, and the use of toxic reagents and solvents have limited their full potential as a versatile fragment. Recently, use of green chemistry and alternative strategies are being explored to prepare diverse DHQ derivatives. This fragment is used as a synthon for the preparation of biologically active quinazolinones and as a functional substrate for the synthesis of modified DHQ derivatives exhibiting different biological properties. In this review, we provide a comprehensive assessment of the synthesis and biological evaluations of DHQ derivatives.