Endophytes are silent microbial partners of green plants that ensure hosts’ survival in odd conditions. They are known as the factories of multipotent metabolites with diverse bioactivities beneficial to modern pharmaceuticals industry. Endophytic fungi have been screened from a variety of plants and it is the first-time endophytes of club moss is being studied for production of antibacterial and antioxidative compounds. The present study reveals that Lycopodium clavatum L. harbors a potent niche of bioactive endophytic fungi and Colletotrichum alatae LCS1 was the prime producer of antibacterial and antioxidative compounds among them. The minimum inhibitory and bactericidal concentrations of ethyl- acetate culture extract ranged from 15.62 to 250 μg/mL against four Gram negative and three Gram positive microorganisms including methicillin resistant Staphylococcus aureus (ATCC-33591). Bio-autogram based screening followed by Gas chromatographic analysis confirmed the occurrence of 17 bioactive compounds and α-bisabolol is known to be the prime one. Alfa bisabolol is a unique and versatile bioactive essential oil and facilitates variety of functions. Killing kinetics data along with leakage of macromolecules into extracellular environment supports the cidal activity of the antibacterial principles at MBC values. Isolate C. alatae LCS1 was optimized by one variable at a time system coupled with response surface methodology for broad spectrum antibacterial production. The organism yielded maximum response (22.66±0.894 mm of zone of inhibition against MRSA) in 250 mL Erlenmeyer flask containing 50 mL potato dextrose broth supplemented with (g/L) glucose, 7.53; yeast extract concentration, 0.47; NaCl, 0.10 with medium pH 6.46; after 134 hours of incubation at 26°C. Optimized fermentation parameters enhanced antibacterial activity up-to more than 50% than the pre-optimized one (10.33±0.57 mm). Endophytic LCS1 was also efficient in free radical scavenging tested by DPPH, ABTS, H2O2 and FRAP assay with an IC50 values of 23.38±5.32 to 82.873±6.479 μg/mL.