This study focuses on isolation of pigment producing bacteria from fresh water sediment.The isolated bacteria were grown in nutrient broth and the absorbance of extracted pigment was read at 400 nm and absorbance of 0.619 was obtained. The effective strains were optimized at pH 11 and temperature 30°C was found to be more favorable for its maximum growth. The molecular weight of efficient bacterial strains was found to be approximately 1500 bp. The antioxidant was performed using DPPH and ABTS assay. The IC 50 value of M. arborescens was higher in all the three assays in comparison with S. paucimobilis. The extracted pigment was characterized for the presence of compounds using GC-MS and FTIR analysis to determine the functional groups. As the pigment obtained from Microbacterium arborescens had shown better antioxidant activity it may be used as colorant in food industrial applications.