Polybrominated diphenyl ether (PBDE) compounds, derived from marine organisms, originate from symbiosis between marine sponges and cyanobacteria or bacteria. PBDEs have broad biological spectra; therefore, we analyzed structure and activity relationships of PBDEs to determine their potential as anticancer or antibacterial lead structures, through reactions and computational studies. Six known PBDEs (1–6) were isolated from the sponge, Lamellodysdiea herbacea; ¹³C NMR data for compound 6 are reported for the first time and their assignments are confirmed by their theoretical ¹³C NMR chemical shifts (RMSE < 4.0 ppm). Methylation and acetylation of 1 (2, 3, 4, 5-tetrabromo-6-(3′, 5′-dibromo-2′-hydroxyphenoxy) phenol) at the phenol functional group gave seven molecules (7–13), of which 10, 12, and 13 were new. New crystal structures for 8 and 9 are also reported. Debromination carried out on 1 produced nine compounds (1, 2, 14, 16–18, 20, 23, and 26) of which 18 was new. Debromination product 16 showed a significant IC₅₀ 8.65 ± 1.11; 8.11 ± 1.43 µM against human embryonic kidney (HEK293T) cells. Compounds 1 and 16 exhibited antibacterial activity against Gram-positive Staphylococcus aureus and Gram-negative Klebsiella pneumoniae with MID 0.078 µg/disk. The number of four bromine atoms and two phenol functional groups are important for antibacterial activity (S. aureus and K. pneumoniae) and cytotoxicity (HEK293T). The result was supported by analysis of frontier molecular orbitals (FMOs). We also propose possible products of acetylation and debromination using analysis of FMOs and electrostatic charges and we confirm the experimental result.