Microorganisms, in particular bacteria and fungi, are known to cause a number of diseases in plants and animals. Many pathogenic microorganisms have developed resistance against commonly used antibiotics and synthetic fungicides. Lichens and their metabolites are shown to be promising alternatives for synthetic chemicals. The lichen genus Usnea (Parmeliaceae) is characterized by pendulous growth and the presence of usnic acid. The present study was conducted to determine antimicrobial activity two Usnea species namely U. ghattensis G. Awasthi and U. undulata Stirt. The lichens were identified on the basis of morphological, anatomical and chemical tests. Extraction was carried out by maceration using methanol as solvent. Antibacterial activity was determined against a panel of 8 test bacteria by Agar well diffusion assay. Antifungal activity was assessed by Poisoned food technique against three phytopathogenic fungi. TLC revealed the presence of Usnic acid in both lichens. Both lichens inhibited test bacteria in a concentration dependent manner. Inhibition of Klebsiella pneumoniae was marked when compared to other bacteria. Extracts of both lichens inhibited test fungi dose dependently. Diameter of fungal colonies in poisoned plates was considerably lesser when compared to control plates. Inhibitory activity was highest against Bipolaris sorokiniana followed by Colletotrichum capsici and Fusarium oxysporum. The promising inhibitory activity of both Usnea species could be ascribed to the presence of secondary metabolites mainly usnic acid. These lichens appear to be promising candidates for the development of antimicrobial agents. Further studies on isolation of active principles from lichen extracts and their bioactivity determinations are to be carried out.