As an investigative study, the potent bacterium Serratia marcescens SB08 was screened from the enteric gut of sulfur butterfly (Kricogonia lyside). Its pigment potential was tested, and the pigment was identified as prodigiosin by structural studies using High Performance Liquid Chromatography (HPLC), Gas Chromatography-Mass Spectroscopy (GC-MS), Fourier Transform Infrared Spectroscopy (FTIR) and Nuclear Magnetic Resonance (NMR). Various conditions, including pH, reaction time, temperature, color intensity, and fastness properties, were studied for pure silk, China silk, and cotton yarns, and the conditions for effective dyeing were optimized. Further, the pigment's antimicrobial pursuit was tested to counter the common pathogens Bacillus subtilis MTCC2388, Escherichia coli MTCC443, Klebsiella pneumonia MTCC109, Proteus vulgaris MTCC1771, and Pseudomonas aeruginosa MTCC1688. The pigment was largely effectual and exhibited utmost zones of inhibition, thus demonstrating the finest antimicrobial effect against the microbes tested. The textile yarn materials soaked with this intrinsic dye pigment also exhibited antimicrobial action.