Streptomyces species have been known to produce a diverse array of bioactive secondary metabolites with significant antimicrobial and anticancer properties. In this study, we focused on the bioactive compound derived from the potent strain RVE129 and conducted its purification and characterization. We also investigated its bioactivity against various pathogens and its cytotoxicity towards human cervical cancer (HeLa) cells. The strain RVE129 was previously isolated from unexplored regions of the rift valley soil in Hawassa, Ethiopia, and its identification was accomplished through phenotypic characteristics and complete sequencing of the 16S rRNA gene. The strain was found to be closely related to Streptomyces monomycini strain NRRL B-24309 (99.65%), with accession no. (ON786620). The active fraction obtained from the strain underwent bioassay-guided purification using the TLC method after extraction with ethyl acetate. Subsequently, the compound was subjected to physicochemical and structural characterization using UV–Vis, FTIR, and NMR spectroscopic methods. Comparison of the spectroscopic data with that of known natural compounds in databases revealed that the antibiotic identified as setamycin. The purified antibiotic (RVE-02) displayed a broad spectrum of bioactivity against both Gram-positive and Gram-negative bacteria, with minimum inhibitory concentration (MIC) values ranging from 1.97 to 125 μg/ml. Furthermore, the antibiotic exhibited significant antiproliferative effects and induced morphological changes in HeLa cells, with an IC50 value of 24.30 μg/ml. These results suggest that the antibiotic obtained from S. monomycini RVE129 has the potential to combat pathogenic bacteria, including drug-resistant S. aureus. Additionally, its effect on HeLa cells indicates its promising potential as a cancer chemotherapeutic agent.