In this work, two groups of structurally novel indolo-β-lactam hybrids were synthesized by ketene-imine [2 + 2] cycloaddition reaction. In the first series, the reaction proceeded between various selected aromatic imines and a ketene derived from indole-3-acetic acid. For the second, N-acetic acid indole-3-carbaldehyde was used as the ketene source in reaction with imines. The new indolo-β-lactam hybrids were obtained as exclusively the cis stereoisomer based on 1H NMR spectroscopy and X-ray crystallography studies. These compounds were examined for anticancer and anti-inflammatory activities. Between synthesized compounds, 4b and 4o in the first series showed the most in vitro anticancer activity against HeLa, MCF7 and A549 cancer cell lines. In anti-inflammatory studies, indolo-β-lactam 4e with anti-inflammatory ratio of 85.90 and indolo-β-lactam 9k with anti-inflammatory ratio of 141.23, had the most anti-inflammatory activity than dexamethasone with anti-inflammatory ratio of 37.87, as standard. Molecular docking experiments indicate that the active compounds bind optimally to the 4nos active sites, and suggest that 4e and 9k may serve as potential inhibitors of iNOS for treatment of inflammatory disorders. [Figure not available: see fulltext.].