The present study was conducted to determine the antibacterial and antifungal potential of actinomycetes isolated from soil samples collected from two different locations of Punjab, India. The actinomycetes isolates showed various types of color pigments like pink, yellow, orange, red and brown which may have potential use in industries. Out of 23 actinomycetes isolates, 7 of them showed significant inhibition of different Gram positive and Gram negative bacteria and also some fungi. Actinomycetes isolate no. A4 inhibited Klebsiella pneumonia and Salmonella enterica typhimurium efficiently. Actinomycetes isolate no. A5 inhibited E. coli, Staphylococcus aureus, Klebsiella pneumonia, Salmonella enterica typhimurium and the fungi Alternaria alternata and Trichodermaviride. The crude antimicrobial compound from the best isolates A4 and A5 were obtained by ethyl-acetate extraction and the MIC against two different bacteria Klebsiella pneumonia and Salmonella enterica typhimurium were 15µg/ml and 12µg/ml respectively. Determination of the nature of the antimicrobial compound by TLC analysis indicated that the compound may be alcohol, phenol or steroid in nature. The antimicrobial compound obtained from isolate A5 was stable even above 60 °C and in the presence of proteinase K enzyme (5 mg/ml). The results showed that isolate A5 which produced dark orange colour pigment has excellent antimicrobial characteristics with very low MIC value and stability at high temperatures and high concentration of proteinase K.