Recurrence of old diseases and emergence of new diseases demands for availability of effective therapeutic agents of higher therapeutic index. Plants are considered as rich source of therapeutic agents. The history of herbology is intertwined with that of modern medicine. Herbal treatment is useful for both acute and chronic conditions including AIDS, cancer and diabetes. Contemporary studies clearly demonstrate that plants are very rich source of novel antimicrobial and immunomodulatory substances. In the present study 370 natural substances (pure compounds, extracts, fraction and aromatic acids) isolated from various part of the twenty medicinally important plants, including Polyalthia longifolia, Holarrhena pubescens, Tagetes patula, Tagetes erecta, Eucalyptus camaldulensis Morinda citrifolia Datura innoxia, Azadirachta indica, Melia azedarach, Psidium guajava, Syzygium aromaticum, Lantana camara, and others, were screened for biological potentials. These plant samples were obtained from H.E.J. Research Institute of Chemistry. Antimicrobial activity of these compounds was determined against thirty five bacterial and fourteen fungal strains by disc diffusion method. Highest activity was observed in plant S. aromaticum (clove) where all the extracts exhibited antimicrobial activity against all the organisms (bacteria and fungi) tested with MIC value (0.78-100 μg/disc). These extracts were more potent against Micrococcus luteus ATCC 9341, Bacillus cereus ATCC 11778, Bacillus subtilis and Bacillus thuringiensis as compare to ampicillin and streptomycin used as a control. Similarly compounds from P. longifolia var. pendula, exhibited excellent activity against Gram positive bacteria and fungi with MIC 0.39-100 μg/disc. Few extracts, their fractions and pure compounds from root, stem and berries exhibited excellent anti-MRSA activity with MIC 0.39-3.12 μg/disc. Compounds isolated from berries also exhibited good anti-mycobacterial activity against Mycobacterium tuberculosis H37Rv (MIC 6.25 -100 μg/disc). Few extracts from D. innoxia, H. pubescens, M. citrifolia and some aromatic acids from M. azederah exhibited good activity against Gram positive bacteria and dermatophytes tested. However, rest of the plants extracts showed variable activity (low to moderate) against different organisms (bacteria and fungi), while very few of them were active against Gram negative bacteria. Immunomodulatory activity of 24 selected compounds was studied on superoxide production using chemiluminescence assay; and T lymphocytes proliferation by radio labeled Thymidine incorporation method. Diterpenes isolated from root bark of P. longifolia var. Pendula; Hydroquinone, its derivative; 1,3- Dimethoxy anthraquinone from fruits of M. citrifolia; Patuletin from T. patula, Lantanilic acid from L. camara and (Hp. Bases) methanolic extract of H. pubescens exhibited significant inhibitory effect against the production of superoxide by whole blood, PMN, MN and Macrophages (p<0.005 - p<0.0005). All these compounds/extract were found more potent than ibuprofen. Hydroquinone from M. citrifolia; Patuletin from T. patula; fractions/pure compounds of P. longifolia; Lantanolic acid from L. camara and Ursolic acid lactone from E. camaldulensis, inhibited T-cells proliferation. Hydroquinone and diterpene 4(18), 12E-Clerodadien-15, 16-N [4’ (18’), 13’ (16’) E-clerodadien- 15’-oic acid] imide were found more potent than prednisolone (P<0.005, P<0.0005 respectively). Lantanolic acid, Lantanilic acid, Ursolic acid lactone, Anithol, pure compounds from P. longifolia var. pendula (PGM-2EA, PBBM-2EA, PSBM2EA, 3PC, 36PM, 72PM, 16+18, fractions 6EA, 6a+b) and extracts from H. pubescens and T. patula exhibited significant stimulatory effect at their lower concentration (0.78 -6.25 μg/ml) against the production of superoxide by whole blood, PMN, MN and Macrophages. All these compounds also stimulated the production of T-cells in T-cell proliferation assay. Some of the above compounds, showing excellent activity, could be considered as an important agent for developing new antimicrobials as well as immunomodulatory agents. However, further investigation is required, for determining the mode of action of the bioactive principle present in these compounds/ extracts, before recommending these compounds in the list of therapeutic agents.