A series of novel 1,3,4-oxadiazole derivatives (OSD, OCOD, ONOD, OPD, COD, PMOD, and PCOD) were synthesized and characterized. Their structures were confirmed on the basis of IR, NMR and mass spectroscopy and molecular weights were found in the range 300–325 g/mol. Cancerous cell lines (MCF-7, HepG2) and non-cancerous cell lines (Chang liver cells) were treated with these compounds for 48 h, which caused dose dependent decrease in the cell viability. From the seven derivatives, OSD was found to be most potent with IC50 value close to 50 μM on all tested cell lines. Hence, this compound was selected for mechanistic study on HepG2 cell lines. Fluorescent cell staining and DNA fragmentation study of 50 μM OSD on HepG2 cells, showed events marked by apoptosis such as nuclear fragmentation, cytoplasm shrinkage and DNA damage. Further, the cells with same treatment were quantified for apoptosis using annexin V-PI flow cytometric technique. The percentage of apoptotic cells was significantly higher (p < 0.05) after OSD treatment compared to control cells. OSD induced a significant increase (p < 0.05) in the expression of the tumor suppressor p53 in HepG2 cells. The constitutive expression of anti-apoptotic protein Bcl-2 significantly decreased (p < 0.05) after treatment, while the expression of proapoptotic protein Bax significantly increased (p < 0.05). The change in Bax to Bcl-2 ratio suggested involvement of Bcl-2 family in induction of apoptosis. Furthermore, the levels of caspase-9 and caspase-3 were significantly (p < 0.05) up regulated in HepG2 cells after OSD treatment. The data suggest that 1,3,4-oxadiazole derivatives induce apoptosis mediated by intrinsic pathway of apoptosis. The findings strengthen the potential of the 1,3,4-oxadiazole scaffold OSD, as an agent with chemotherapeutic and cytostatic activity in human hepatocellular carcinoma in vitro.