The alarming burden of antibiotic resistance in nosocomial pathogens warrants the discovery and development of new and effective antimicrobial compounds. Small cationic antimicrobial peptides seem to be a promising therapeutic alternative to fight multi-drug resistance. This study investigated the in-vitro potential of a previously reported lantibiotic, paenibacillin, from the clinical perspective. An antimicrobial peptide, M152-P4, was isolated, purified and characterized from a mud isolate, and its susceptibility was determined in clinical isolates of Staphylococcus aureus and Enterococcus spp. Time-kill kinetics, resistance, probable mode of action, haemolytic activity and mammalian cytotoxicity were investigated. M152-P4 was identified as paenibacillin based on mass spectroscopy data, amino acid analysis and biosynthetic gene cluster analysis. It had potent antibacterial activity against the Gram-positive pathogens tested, with minimum inhibitory concentrations from 0.1 to 1.56 µM. It appeared very challenging for S. aureus to develop resistance to this compound. Also, paenibacillin penetrated the outer layer of bacteria, and depolarized the membrane completely by creating pores in the plasma membrane with better potential than nisin. Paenibacillin showed no haemolysis up to 60 µM, and the half maximal inhibitory concentration on mammalian cell lines was >100 µM. These results highlight the excellent antibacterial properties of paenibacillin in clinically relevant pathogens. It is stable in the presence of serum, and non-haemolytic and non-cytotoxic even above the therapeutic concentration. Further research efforts regarding toxicity and in-vivo efficacy are necessary to develop paenibacillin as a next-generation therapeutic drug to overcome multi-drug resistance in Gram-positive pathogens.