Aim This study investigated the bacterial diversity of dead insects collected from olive tree orchards widely cultivated in Tunisia. We aimed to explore metabolic diversity, screen enzymatic activities for biotechnological applications and carry out preliminary bioassays for bio-insecticide development. Methods and results A total of 50 bacteria strains were randomly isolated from four different biotopes situated in Sfax (Tunisia). 16S rRNA gene sequencing was used to identify 24 species, and isolates were evaluated for enzymatic activity and antimicrobial potential. Nineteen of the total number of Bacillus strains have enzymatic activity compared to strains from the other genera (14/50). Our bacterial collection was evaluated for antimicrobial potential against bacterial and fungal isolates. Isolates B8-2 (Bacillus subtilis) showed strong antibacterial activities and isolates B2-3 (Bacillus licheniformis) and B10-1 (Serratia marcescens) showed the highest antifungal activity. Seventeen of the total number of isolates caused greater than 50% mortality rate of second and fourth instar larvae of Ephestia kuehniella. Conclusion The selected species from olive orchards represent a broad spectrum of antimicrobial and insecticidal activities and can be considered promising resources in biological control. Significance and Impact of the Study Bacteria isolated from olive pests in olive orchards were investigated for detecting their potential biotechnological applications.