Abstract The majority of the bioactive compounds synthesized by bacteria as secondary metabolites are low molecular mass products, not essential for the growth of producing organisms, but very important for human health, the environment, and the economy of the society. They exhibit several biological properties, which include antibiotics, antitumor agents, antimicrobial agents, and others. Polar organisms and those growing under stresses have evolved unique defense mechanisms against the extreme environment leading to the biosynthesis of novel biomolecules with diverse activities. The soil–plant–microbe interactions are complex mutualistic interactions and established by a number of bioactive compounds synthesized as secondary metabolites. The high diversity of bacteria under plant–microbe interactions and their adaptations to several stresses seem to be an untraded source of new bioactive compounds. During the last 2 decades, the novel secondary metabolites from the bacteria growing under harsh conditions and under symbiotic interactions have been in high demand in pharmaceutical and naturopathic sciences. The secondary metabolites are synthesized by a variety of enzymatic pathways and their chemical nature can be modified by tailoring enzymes for biotechnological applications. There has been tremendous progress in the development of genomic-guided and novel synthetic biology approaches to enhance the production of bioactive compounds of interest. The temperate phages establish symbiotic interaction with the infecting bacteria under nutrient limitations, known as lysogeny. Phage-encoded endotoxin contributes to the host bacterium by enhancing colonization or competitiveness in the host. During the last few decades, important advances have been made on the mechanism at the biochemical level to understand these interactions. This review aims to describe the advances in the synthesis of the bioactive compounds, giving special emphasis to those reported for bacteria involved in a mutualistic relationship.