The marine environmental conditions are exceptionally different from terrestrial ones, it is assumed that marine actinomycetes might produce novel bioactive compounds. Hence marine sediments, collected from the South East coast of Bay of Bengal, were screened 16 isolates were obtained on starchcasein agar media. Preliminary screening was done using crossstreak method against fungal pathogens. The most potent strains were used to extract the antifungal substances. The antifungal activities were performed using agar diffusion method. All of the 16 isolates were active against at least to one of the test organisms. Of these, 5 actinomycetes were active against Pencillium chrysogenum, 3 against Candida albicans, 4 against Aspergillus niger and 3 against Aspergillus flavus, 2 isolates were active against Saccharomyces cerevisiae, 3 isolates against Aspergillus fumigatus, 4 isolates against Geotrichum candidum and finally all isolates showed activity against the fungal phytopathogens.Of all the 16 isolates, five best antagonistic actinomycetes isolates were selected for further studies. All the above isolates were characterized and identified by microscopical and macroscopical observations. Identification of the isolates publicized that all isolates belong to the genus Streptomyces. The results of this investigation revealed that the marine actinomycetes of Bay of Bengal sediments were potent source of novel antibiotics and bioactive compounds. The marine isolate Streptomyces sp. VSBT-501 was found to be more efficient in the production of secondary metabolites. Also further consideration has been paid to study their antifungal properties and their other biologically useful properties.