The present invention provides a process for the preparation of Teriflunomide (Formula-I). The present invention describes the synthesis of Teriflunomide without isolating the intermediate Leflunomide. Teriflunomide is prepared from 5-Methyl isoxazole-4-carboxylic acid by converting to its acid chloride and coupling with 4-trifluoromethyl aniline to obtain Leflunomide (which is not isolated) followed by ring opening reaction using aq. Sodium Hydroxide to form Teriflunomide. In other words, the process is telescoped from 5-methylisoxazole-4-carbonyl chloride.