Phenazine natural products/compounds possess a range of biological activities, including anti-microbial and cytotoxic, making them valuable starting materials for drug development in several therapeutic areas. These compounds are biosynthesized almost exclusively by eubacteria of both terrestrial and marine origins from erythrose 4-phosphate and phosphoenol pyruvate via the shikimate pathway. In this paper, we report isolation of actinomycete bacteria from marine sediment collected in the Trondheimfjord, Norway. Screening of the isolates for biological activity produced several “hits”, one of which was followed up by identification and purification of the active compound from the actinomycete bacterium Streptosporangium sp. The purified compound, identified as 1,6-dihydroxyphenazine-5,10-dioxide (iodinin), was subjected to extended tests for biological activity against bacteria, fungi and mammalian cells. In these tests, the iodinin demonstrated high anti-microbial and cytotoxic activity, and was particularly potent against leukaemia cell lines. This is the first report on the isolation of iodinin from a marine-derived Streptosporangium.