Biginelli three-component condensation of an aldehyde, beta-keto ester, and urea proceeds smoothly on the surface of the silver salt of heteropolyacid (HPA), i.e. Ag3PW12O40, in water to afford the corresponding 3,4-dihydropyrimidinones in high-to-quantitative yields under mild conditions. The heterogeneous solid acid provides ease of separation of the catalyst and isolation of the products. The recovered catalyst can be recycled in subsequent reactions with consistent activity. Compared to the classical Biginelli reaction conditions, this new method has the advantages of improved yields, reusability of the catalyst, an eco-friendly solvent, ease of isolation of products, and simplicity in the experimental procedure. ((C) Wiley-VCH Verlag GmbH & Co. KGaA, 69451 Weinheim, Germany, 2004).