Resistance in human bacterial pathogens and lack of novel antibiotic development has led to the need for new antibiotics. Therefore, the current study was focused on endophytic bacteria from Gracilaria edulis, an edible seaweed, capable of synthesizing novel bioactive compounds with potential applications in the inhibition of human pathogens. The endophyte, identified as Bacillus subtilis through 16S rRNA gene sequencing, exhibited significant antibacterial activity against bacterial human pathogens. Using GC-MS, FTIR and NMR the lead compound was identified as Pyrrolo[1,2-α] pyrazine-1,4-dione, hexahydro-3-(2-methylpropyl) (PPDHMP). Optimized media composition using glucose, proline and valine significantly enhanced the production of PPDHMP which was observed by the increase in zone of inhibition. Molecular docking of PPDHMP indicated a high binding affinity to beta-lactamase, suggesting its potential as a beta-lactamase inhibitor. PPDHMP exhibited cell wall inhibitory activity and ADMET analysis revealed promising pharmacokinetic and toxicity profiles indicating its potential for further evaluation as an oral antibiotic candidate. Phytotoxicity assessments and hemolytic assay confirmed the non-toxic nature of the metabolites produced. This research highlights the immense potential of marine endophytes in addressing the escalating issue of antibiotic resistance and paves the way for innovative solutions in antimicrobial therapy.