To provide a method for producing the subject compound useful as an agricultural or pharmaceutical solvent or the like by which the compound is continuously produced in a high yield by reacting a specific urea derivative with a specific diketone, and hydrogenating the reaction product in the presence of a metal-containing catalyst.

A urea derivative of formula I (Y and Y' are each independently H, a linear or branched 1-4C alkyl, a 3-12C cycloalkyl or the like) is reacted with a diketone of formula II [X and X' are each independently H, hydroxy, a linear or branched 1-4C alkyl, a 3-12C cycloalkyl, a 1-4C alkoxy or the like; Z is a single bond, a 1-4C alkylene (substituted with a group X or X')], and the reaction product is hydrogenated in the presence of a metal-containing catalyst to provide the objective cyclic urea derivative of formula III in the method for producing the cyclic urea derivative. The reaction of the urea derivative with the diketone is preferably carried out in an aqueous solvent or an aqueous organism solvent, especially preferably carried out in the aqueous organic solvent containing 1-80 wt.% organic solvent based on the educt mixture.