BACKGROUND: The increased rate of resistance among two highly concerned pathogens i.e. methicillin-resistant Staphylococcus aureus (MRSA) and vancomycin-resistant Enterococcus (VRE) necessitates the discovery of novel anti-MRSA and anti-VRE compounds. In microbial drug discovery, Streptomyces are well known source of two-thirds of natural antibiotics used clinically. Hence, screening of new strains of streptomycetes is the key step to get novel bioactive compounds with antimicrobial activity against drug resistant bacteria. RESULTS: In the present study, Streptomyces antibioticus strain M7, possessing potent antibacterial activity against different pathogenic bacteria, was isolated from rhizospheric soil of Stevia rebudiana. 16S rRNA sequence of M7 (1418 bp) showed 96.47-100% similarity with different Streptomyces spp. and the maximum similarity (100%) was observed with Streptomyces antibioticus NBRC 12838(T) (AB184184). Phylogenetic analysis using neighbor joining method further validated its similarity with Streptomyces antibioticus NBRC 12838 T (AB184184) as it formed clade with the latter and showed high boot strap value (99%). Antibacterial metabolites isolated from the fermentation broth were characterized using NMR, FT-IR and LC-MS as actinomycins V, X(2) and D. The purified actinomycins exhibited potent antibacterial activities against test bacteria viz. B. subtilis, K. pneumoniae sub sp. pneumoniae, S. aureus, S. epidermidis, S. typhi, E. coli, MRSA and VRE. Among these actinomycins, actinomycin X(2) was more effective as compared to actinomycins D and V. The minimum inhibitory concentration values of purified compounds against a set of test bacterial organisms viz. VRE, MRSA, E. coli (S1-LF), K. pneumoniae sub sp. pneumoniae and B. subtilis ranged between 1.95 and 31.25 mug/ml. CONCLUSIONS: This study demonstrates that actinomycins V, X(2) and D produced by S. antibioticus strain M7 hold the potential to be used against multidrug resistant bacteria, particularly VRE and MRSA.