A metagenomic library consisting of 15,000 clones was constructed from the mangrove sediment. An antimicrobially active clone from the metagenomic library PS49 was identified by function- based screening. This paper presents the results of the biochemical characterization and metagenomic library screening of the marine-derived antibiotic, 8-demethoxy-10-deoxysteffimycin. Plasmid libraries were constructed, and clones were produced using a metagenomic approach. Out of 15,000 clones, 81 clones were screened for antimicrobial activity, and five potential clones were selected. The activity of one clone was characterized and named as PS49. The bioactive compounds from the selected clone were checked for antimicrobial, antioxidant, and anticancer activities. The clone PS49 was tested against various pathogens including bacteria and fungi and it showed inhibitory effects against all the tested pathogens. The antimicrobially active fractions were then crystallized and subjected to spectroscopic analysis such as FTIR, NMR and LC-MS analysis. The substance from clone PS49 has finally been recognized, and the compound from clone PS49 has been identified as 8-demethoxy-10-deoxysteffimycin. The substances isolated from the PS49 clone exhibited strong anticancer activity against skin cancer-cell lines SK-MEL2. The compounds showed a reduction in cell viability with an increase in the compound concentration. The compounds obtained from clone PS49 showed an IC value of 85 µg/ml.