Fungus isolated from soil has been evaluated for its antimicrobial activity which showed broad spectrum antimicrobial activity against all the pathogenic microorganisms used. Optimization was done by response surface methodology (RSM) to further optimize the medium which could further enhance the antimicrobial activity by 1.1-1.9 folds. Column chromatography was used to isolate the active compound which was characterized to be by various spectroscopic techniques such NMR, IR and LCMS and it was found to be apparently novel compound 7-methoxy-2,2-dimethyl-4-octa-4',6'-dienyl-2 H -napthalene-1-one. MIC of the active compound ranged from (0.5-15 µg/mL which was found to be comparable with the standard antibiotics. Viable cell count studies of the active compound showed it to be bactericidal in nature. Further, the compound when tested for its biosafety was found neither to be cytotoxic nor mutagenic. Cytotoxicity studies of the compound on cancer cell lines showed a valuable cytotoxic potential against all tested human cancer cell lines. Further, the compound induces apoptosis in lung cancer (A549) cells reveled by increase the distribution of nuclear DNA in Sub G1 phase as observed in flow cytometry. The study demonstrated that an apparently novel compound isolated from Penicillium sp. seems to be a stable and potent antimicrobial.