The misuse and overuse of antibiotics have led to the emergence of multidrug-resistant microorganisms, which decreases the chance of treating those infected with existing antibiotics. This resistance calls for the search of new antimicrobials from prolific producers of novel natural products including marine sponges. Many of the novel active compounds reported from sponges have originated from their microbial symbionts. Therefore, this study aims to screen for bioactive metabolites from bacteria isolated from sponges. Twelve sponge samples were collected from South Australian marine environments and grown on seven isolation media under four incubation conditions; a total of 1234 bacterial isolates were obtained. Of these, 169 bacteria were tested in media optimized for production of antimicrobial metabolites and screened against eleven human pathogens. Seventy bacteria were found to be active against at least one test bacterial or fungal pathogen, while 37% of the tested bacteria showed activity against Staphylococcus aureus including methicillin-resistant strains and antifungal activity was produced by 21% the isolates. A potential novel active compound was purified possessing inhibitory activity against S. aureus. Using 16S rRNA, the strain was identified as Streptomyces sp. Our study highlights that the marine sponges of South Australia are a rich source of abundant and diverse bacteria producing metabolites with antimicrobial activities against human pathogenic bacteria and fungi.