Skin and chronic wound infections caused by various pathogenic bacteria are an increasing and urgent health problem worldwide. In the present investigation ethyl acetate extract of an Achromobacter sp. associated with a Rhabditis entomopathogenic nematode (EPN), displayed promising antibacterial property and was further purified by silica gel column chromatography to get three different cyclic dipeptides (CDPs). Based on the spectral data and Marfey's analyses, the CDPs were identified as cyclo(D-Leu-D-Arg) (1), cyclo(L-Trp-L-Arg) (2), and cyclo(D-Trp-D-Arg) (3), respectively. Three CDPs were active against all the 10 wound associated bacteria tested. The significant antibacterial activity was recorded by CDP 3, and highest activity of 0.5 μg/ml was recorded against Staphylococcus aureus and Pseudomonas aeruginosa. The synergistic antibacterial activities of CDPs and ampicillin were assessed using the checkerboard microdilution method. The results of the current study recorded that the combined effects of CDPs and ampicillin principally recorded synergistic activity. Interestingly, the combination of CDPs and ampicillin also recorded enhanced inhibition of biofilm formation by bacteria. Moreover, CDPs significantly stimulate the production of IL-10 and IL-4 (anti-inflammatory cytokines) by human peripheral blood mononuclear cells. CDPs do not make any significant effect on the production of pro-inflammatory cytokines like TNF-α. The three CDPs have been studied for their effect on intracellular S. aureus in murine macrophages (J774) using 24 h exposure to 0.5X, 1X, and 2X MIC concentrations. Significant decrease in intracellular S. aureus burden was recorded by CDPs. CDPs also recorded no cytotoxicity toward FS normal fibroblast, VERO, and L231 normal lung epithelial cell lines. Antimicrobial activity of the arginine containing CDPs against the wound associated bacteria is reported here for the first. Moreover, this is also the first report on the production of CDPs by Achromobacter sp. Finally, we conclude that the Achromobacter sp. is an incredibly promising source of natural bioactive secondary metabolites especially against wound pathogenic bacteria that may receive significant benefit in the field of human medicine in near future as topical agents.