A series of 4-arylmethylene-3-methylisoxazol-5(4H)-one derivatives are obtained via treating ethyl acetoacetate, hydroxylamine hydrochloride and variety of aromatic aldehyde compounds in the presence of antimony trichloride as an efficient catalyst in aqueous media. Mild conditions, safe, short reaction times, commercially available catalyst, environmentally friendly, no uses of organic solvent and high yields are remarkable advantages to this process. (Z)-4-(3-hydroxybenzylidene)-3-methylisoxazol-5(4H)-one, (HBIM), is characterized by theoretical (density functional theory) and experimental (IR, ¹H NMR, CV and UV). The structural parameters, vibrational frequencies, molecular electrostatic potential, frontier molecular orbital analysis (HOMO–LUMO), thermodynamic properties and nonlinear optical properties are found and discussed. UV–Vis spectra are recorded in two organic solvents. Thermal stability of HBIM is studied by thermogravimetric analysis. The molecule orbital contributions are studied using the total and partial density of states (TDOS and PDOS).