Synthetic dyes are hazardous to the environment and humans due to their toxic and recalcitrant nature. Hence, the present study attempts to produce eco-friendly dye from the sago industrial waste using S. marcescens SS1. The dye produced by the bacterial bioconversion of sago was characterized by GC-MS and obtained 13.423 acquisition time, which is similar to the standard prodigiosin. The effects of the dyeing parameters were optimized for Jute fabric using tannic acid as a pre mordant, the maximum uptake of dye was observed at 80 °C, pH 7, 60 mins with the K/S of 6.6. The minimum K/S value of 3.9 was observed at 65 °C, pH 3 in 45 min. Better colour fastness was observed in prodigiosin with mordant compared to without mordant. The antimicrobial activity of dyed fabric was tested against a few pathogenic bacteria and it showed maximum activity against P. aeruginosa. The dye extracted from S. marcescens SS1 prodigiosin was found to be an effective dyeing agent and also pose antimicrobial properties.