Grewia ferruginea is one of the traditional medicinal plants used in Ethiopia against various ailments. In view of its traditional use and absence of literature report, this study was intended to isolate phytochemical constituents and evaluate in vitro biological activities of the bark of G. ferruginea. The essential oil analyzed by GC-MS indicated the presence of 48 components from which 32 were characterized. Additionally, lupeol (33), β-sitosterol (34), stigmasterol (35), daucosterol (36), 7-keto-β-sitosterol (37), 6-keto-5,6-dihydro-β-sitosterol(38), and catechin (39) were isolated and purified using chromatographic methods and characterized by 1D and 2D NMR spectroscopy. At 5 mg/mL, among all test bacteria, compound 33 and 39 exhibited inhibition zone (IZ) of about 15.2 and 12.40 mm against P. aeruginosa, respectively. Compounds 34 and 35 displayed IZ of 14.4 and 15.1 mm against S. aureus and S. pyogenes, respectively. Whereas, compounds 37 and 38 showed IZ of 14.7 mm against E. coli. On the other hand, IZ of the essential oil against S. aureus was 13.4 mm. At 62.5 µg/mL, among the isolated compounds, compound 39 inhibited the highest (90.2%) DPPH radical while compounds 34 and 35 inhibited the least (18.5%) DPPH radical and their potency was confirmed by their IC50 value (2.0 and 85.7 µg/mL), respectively. In another way, the essential oil inhibited only 28.6% DPPH radical. According to the molecular docking studies result, among selected targets, Pseudomonas quinolone signal (PqsA) and human topoisomerase IIβ inhibited more (-9.1 and − 8.8 kcal/mol), respectively by compound 33. E. coli DNA Gyrase B inhibited more (-8.0 kcal/mol) by compound 38. Whereas pyruvate kinase M2 inhibited more (-9.9 kcal/mol) by compound 39. The result of SwissADME and Pro Tox II online tool analysis indicated that all tested isolated compounds fulfill the Lipinski’s rule of five and none of them are suspected to be fatal if swallowed. Therefore, the in silico study result of compound 33–39 supported the in vitro test result and hence might be considered as a lead compound in antibacterial and anticancer drug development. Furthermore, the presence of these active phytochemicals might be an evidence for the traditional uses of the plant.