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Endophytic bacteria boost host plant defense and growth by producing vital compounds. In the current study, a bacterial strain was isolated from the <i>Boswellia sacra</i> plant and identified as <i>Bacillus subtilis</i> strain EP1 (accession number: MT256301) through 16S RNA gene sequencing. From the identified bacteria, four compounds—<b>1</b> (4-(4-cinnamoyloxy)phenyl)butanoic acid), <b>2</b> (cyclo-(L-Pro-D-Tyr)), <b>3</b> (cyclo-(L-Val-L-Phe)), and <b>4</b> (cyclo-(L-Pro-L-Val))—were isolated and characterized by 1D and 2D NMR and mass spectroscopy. Moreover, antibacterial activity and beta-lactam-producing gene inhibition (δ-(l-α-aminoadipyl)-l-cysteinyl-d-valine synthetase (ACVS) and aminoadipate aminotransferase (AADAT)) assays were performed. Significant antibacterial activity was observed against the human pathogenic bacterial strains (<i>E. coli</i>) by compound <b>4</b> with a 13 ± 0.7 mm zone of inhibition (ZOI), followed by compound <b>1</b> having an 11 ± 0.7 mm ZOI. In contrast, the least antibacterial activity among the tested samples was offered by compound <b>2</b> with a 10 ± 0.9 mm ZOI compared to the standard (26 ± 1.2 mm). Similarly, the molecular analysis of beta-lactam inhibition determined that compounds <b>3</b> and <b>4</b> inhibited the two genes (2- to 4-fold) in the beta-lactam biosynthesis (ACVS and AADAT) pathway. From these results, it can be concluded that future research on these compounds could lead to the inhibition of antibiotic-resistant pathogenic bacterial strains.