Abstract: Disclosed is an improved process for producing pure and thermally color stable crystalline Form I of 2-methyl-4-(4-methyl-1-piperazinyl)-10H-thieno[2,3-b][1,5]benzodiazepine and product thereof. The process comprises of reacting 2-(2-aminoanilino)-5-methylthiophene-3-carbonitrile with N-methyl piperazine in conjunction with N-methylpiperazine acid salt, to produce 2-methyl-4-(4-methyl-1-piperazinyl)-10H-thieno[2,3-b][1,5]benzodiazepine. Also disclosed is a process for obtaining the Polymorphic Form I of 2-methyl-4-(4-methyl-1-piperazinyl)-10H-thieno[2,3-b][l,5J benzodiazepine by crystallizing the crude 2-methyl-4-(4-methyl-1-piperazinyl)-10H-thieno[2,3-b][1,5]benzodiazepine in a mixture of solvents. Further the invention also provides a new polymorph of Olanzapine, dihydrate Form Ji and process for its preparation and a new hydrate Form J2 of Olanzapine having moisture content 1-3% and process for its preparation.