A new cyclic dipeptide, cyclo(phenylalanine-proline) (cFP), was isolated from the marine bacterium Exiguobacterium profundum SW22 and characterized by NMR and high-resolution mass spectrometry. In silico profiling predicted favorable pharmacokinetic and drug-like properties for cFP. The compound demonstrated dose-dependent cytotoxicity against human breast (MDA MB-231), pancreatic (PAN C1), and prostate (PC 3) cancer cell lines with IC₅₀ values of 47.24 ± 0.42, 40.96 ± 0.68, and 110 ± 1.48 µM, respectively, accompanied by apoptosis-associated morphological changes. Biophysical studies demonstrated strong binding affinity between cFP and human serum albumin (HSA), confirmed through UV-visible absorption spectroscopy, fluorescence quenching, and circular dichroism analyses, with validation using well-characterized reference ligand warfarin as control. Results suggest static quenching via ground-state complex formation with negligible lifetime changes, consistent with control molecule (warfarin) binding via hydrogen bonding and van der Waals interactions, accompanied by ligand-induced decreases in HSA α-helical content. Molecular docking studies of HSA with cFP and warfarin revealed strong binding affinities for both compounds. Further, the molecular dynamics simulations over a 50 ns timeframe confirmed the enhanced stability and persistent interaction of the cFP-HSA complex. Results highlight the cFP as a promising bioactive peptide with potential anticancer, pharmacokinetic and serum binding efficacies advocating further preclinical development for anticancer therapy.