Background Natural dyes are present in living organisms such as animals and plants and microorganisms such as fungi, bacteria, algae, and yeast. Pigments are fast and easy growth by using cheap components and do not effect by environmental conditions because they required some physical factors like heat, light, and pH and also they have many biotechnological applications such as medical and industrial needs. The natural pigments can act as antimicrobial agents and are used in drug manufacturing. Also, it can be used in the food industry as natural colorants instead of the synthetic colorants due to their safety on human health and low toxicity when emitted into the environment. Results A pigmented actinomycetes LS1 strain isolated from El Mahmoudia canal (sediment soil) located in Egypt was microscopically examined and identified as Streptomyces sp. by molecular approach. Extraction, purification, and characterization of produced red pigment metabolite like carotenoids related were established based on spectroscopic studies and comparing the data from the literature. Factors (nutritional and physical) influencing red pigmentation by this isolate were investigated through One Variable At Time (OVAT), and then, the optimal levels of the significant key variables were recorded. Also, the productivity yield reached 30 mg of dried purified pigment/gram dry weight. The biological activity of the red product was tested against Gram-positive and Gram-negative marine bacterial pathogens; the recorded antimicrobial activity is more prominent against (P. aeruginosa ATCC 9027, K. pneumoniae ATCC 13883, S. aureus ATCC 6538, B. subtilis ATCC 6633 and E. coli ATCC 10418) at nearly 0.07 mg mL−1 concentration. Also, the tested red pigment showed a positive antifouling activity (AF) against marine microbes; the activity increased by increasing the pigment concentrations from 1 to 3 mg mL−1. Conclusion The present work focused on the optimization of culture conditions for the production of red pigment by Streptomyces sp. LS1; then, the antibacterial activity and antifouling activity of the produced pigments were tested.