Streptomyces sp. isolate ERI-26 was obtained from the Nilgiris forest soil of Western Ghats, Tamil Nadu, India. Novel anthraquinone compound was isolated from the active fraction 5; it was identified by spectroscopical data using UV, IR, NMR and MASS. The isolated compound 1,5,7-trihydroxy-3-hydroxy methyl anthraquinone was tested against bacteria and fungi at minimum inhibitory concentration level. The compound showed significant antimicrobial activity against bacteria, Staphylococcus aureus at 125 mu g/ml, Staphylococcus epidermidis at 62.5 mu g/m, Bacillus subtilis at 31.25 mu g/ml, fungi; Epidermophyton floccosum at 62.5 mu g/ml, Aspergillus niger at 31.25 mu g/ml, Aspergiller flavus at 31.25 mu g/ml, Trichophyton rubrum at 62.5 mu g/ml and Botrytis cinerea at 62.5 mu g/ml. The isolated compound was subjected to molecular docking studies for the inhibition of TtgR, topoisomerase IV and AmpC beta-lactamase enzymes which are targets for antimicrobials. Docking studies of the compound showed low docking energy indicating its usefulness as antimicrobial agent. 1,5,7-Trihydroxy-3-hydroxy methyl anthraquinone is new, and its antimicrobial and molecular docking properties are reported for the first time.