Objective: To assess the antimicrobial and cytotoxic effects of Methylobacterium sp. isolated from soil sample of Doddabetta forest, Nilgiris, Western Ghats of Tamil Nadu. Methods: Isolation of Methylobacterium was performed from soils by serial dilution plate technique. The strain was grown in modified nutrient gulucose agar (MNGA) medium to study the morphology and biochemical characteristics. Methylobacterium sp. was screened for its antimicrobial activity against pathogenic bacteria and fungi. The strain was subjected to 16S rRNA analysis and was identified as Methylobacterium sp. The nucleotide sequence of the 16S rRNA gene of the isolate exhibited close similarity with other Methylobacterium sp. and has been submitted to Genbank. The antibacterial substances were extracted using chloroform and ethyl acetate from MNGA medium in which ERI-135 had grown for 5 d at 30 ℃. Cytotoxic effect was also studied. GC-MS analysis was carried out. The antimicrobial activity was assessed using broth micro dilution technique. Results: Ethyl acetate extract showed activity against bacteria such as Bacillus subtilis, Klebsiella pneumoniae (K. pneumoniae), Pseudomonas aeruginosa, Salmonella typhimurium, Shigella flexneri, Enterobacter aerogenes, Staphylococcus aureu and Staphylococcus epidermidis (S. epidermidis) and fungi such as, Candida albicans and Trichophyton rubrum. The lowest minimum inhibitory concentrations were: 250 μg/mL against S. epidermidis and 250μg/mL against K. pneumonia. The isolate had the ability to produce enzymes such as protease. The exyract showed cytotoxic effect in human adenocarcinoma cancer cell line (A549). GC-MS analysis showed the presence of isovaleric acid (3.64%), 2-Methylbutanoic acid (5.03%), isobutyramide (5.05%), N,N-oimethylformamide-di-t-butylacetal (9.79%), benzeneacetamide (15.56%), octyl butyl phthalate (3.59%) and diisooctyl phthalate (5.79) in the extract. Conclusions: Methylobacterium sp. (ERI-135) showed promising antibacterial and cytotoxic activity. This is the first report in the antimicrobial and cytotoxic effect of Methylobacterium sp.