Twenty marine sediment samples were collected at the time of low tide from Maharashtra and Goa coasts in July 1999. Heat pretreatment at 41degreesC for 1 to 2 months was found to be most effective for the isolation of marine actinomycetes. Eight different selective media were used for isolation of actinomycetes and starch casein agar and glucose asparagine agar media prepared in natural seawater showed good growth of actinomycetes. Best growth of actinomycetes was observed at 28degreesC after incubation for three weeks. Significant differences were found between the counts of actinomycetes on different media. Out of 80 actinomycetes, 59 actinomycetes showed fast growth, 21 showed slow growth and 53 actinomycetes showed pigmentation of brown (5), gray (30), orange (2), black (8), yellow (4), red (2) and greenish (2) colors. Antibacterial and antifungal activities were tested using cross streak and cylinder plate technique. Out of 80 strains of actinomycetes, 35 showed bioactive activities. Out of 35 strains, 20 showed strong antimicrobial activity against different types of organisms and remaining 15 showed very weak antimicrobial activity. From these twenty strongly bioactive strains, 16 showed activity against Gram-positive, 2 against Gram-negative microorganisms and 7 showed antifungal activities. Out of these actinomycetes, 16 belonged to genus Streptomyces and one each to Streptoverticillium, Catellatospora, Nocardia and Actinopolyspora. Interestingly, Actinopolyspora and Catellatospora species were found in sediments and it shows good antimicrobial activity. Present study clearly indicates that sediment samples from Alibag, Janjira and Goa are potent sources for the isolation of bioactive actinomycetes.