Endophytic fungi are innumerable sources of bioactive metabolites with various biomedical applications. Hence, this study was aimed to isolate and identify the endophytic fungus Paraconiothyrium brasiliense (PB) from the fruit of Capsicum annuum and evaluated their biochemical, antimicrobial, antioxidant, cell viability, and cytotoxicity behavior. Results showed that ethyl acetate extract (EAE) of PE contains flavonoid (31.53 ± 0.9 mg of QE/g of extract) and phenolic (2.59 ± 0.06 mg of GAE/g of extract). The PB-EAE showed significant antioxidant activity in terms of free radicals such as DPPH, ABTS, and Fe3+ scavenging. The antioxidant potential of PB-EAE reflects in normal cell viability and anticancer activity against prostate cancer (PC3) cells. The bacterial inhibitory activity of PB-EAE was equal to commercial antibiotic tetracycline hydrochloride (TCH). Further, GC-MS analysis confirmed the presence of volatile molecules such as o-cymene (CH3C6H4CH(CH3)2), dipentene (C10H16), γ-terpinene (C10H16), 4-carvomenthenol (C10H18O), heneicosane (CH3(CH2)19CH3), 2,5-piperazinedione (C4H6N2O2). Also, molecular docking analysis demonstrated the significant interactions between the compounds of PB-EAE and Dihydropteroate Synthase (Protein ID:5JQ9; DHPS). This study revealed that endophytic P. brasiliense from Capsicum annuum could be a novel source for the isolation of antimicrobials.