Weizhou Island and Xieyang Island are two large and young volcanic sea islands in the northern part of the South China Sea. In this study, high-throughput sequencing (HTS) of 16S rRNA genes was used to explore the diversity of Actinobacteria in the Weizhou and Xieyang Islands. Moreover, a traditional culture-dependent method was utilized to isolate Actinobacteria, and their antibacterial and cytotoxic activities were detected. The alpha diversity indices (ACE metric) of the overall bacterial communities for the larger island (Weizhou) were higher than those for the smaller island (Xieyang). A beta diversity analysis showed a more dispersive pattern of overall bacterial and actinobacterial communities on a larger island (Weizhou). At the order level, Frankiales, Propionibacteriales, Streptomycetales, Micrococcales, Pseudonocardiales, Micromonosporales, Glycomycetales, Corynebacteriales, and Streptosporangiales were the predominant Actinobacteria. A total of 22.7% of the OTUs shared 88%–95% similarity with some known groups. More interestingly, 15 OTUs formed a distinct and most predominant clade, and shared identities of less than 95% with any known families. This is the first report about this unknown group and their 16S rRNA sequences obtained from volcanic soils. A total of 268 actinobacterial strains were isolated by the culture-dependent method. Among them, 55 Streptomyces species were isolated, representing that 76.6% of the total. S. variabilis and S. flavogriseus were the most abundant. Moreover, some rare Actinobacteria were isolated. These included Micromonospora spp., Nocardia spp., Amycolatopsis spp., Tsukamurella spp., Mycobacterium spp., and Nonomuraea spp. Among them, eight Streptomyces spp. exhibited antibacterial activity against Bacillus cereus. Only three strains inhibited the growth of Escherichia coli. Four strains showed good activity against aquatic pathogenic bacterial strains of Streptococcus iniae. The cytotoxicity assay results showed that 27 strains (10.07%) exhibited cytotoxic activity against HeLa and A549 cell lines. Many actinobacterial strains with cytotoxic activity were identified as rare Actinobacteria, which illustrated that volcanic islands are vast reservoirs for Actinobacteria with promising antibacterial and cytotoxic activity. This study may significantly improve our understanding of actinobacterial communities on volcanic islands. The isolated Actinobacteria showed promising prospects for future use.