Desmostachya bipinnata (L.) Stapf [Gramineae (Poaceae)] is used in Indian traditional medicines system for treatment of various diseases such as asthma, kidney stone, diarrhea, wound healing, etc. Some of these traditional claims require authentication by performing animal testing. In present study, D. bipinnata was extracted in alcohol. An alkaloid was isolated from the prepared extract, characterized and evaluated for antidiarrheal and antiasthmatic activity. Isolated compound was characterized by melting point, chemical tests, FT-IR, LC-MS and NMR. Antidiarrheal activity of the isolated compound was evaluated by castor oil and magnesium sulphate induced diarrhea in Wistar rats. Castor oil and magnesium sulphate induced diarrhea in Wistar rats were treated with prepared D. bipinnata alcoholic extract, isolated compound and loperamide. Antiasthamtic activity of the isolated compound was evaluated by isolated guinea pig ileum and histamine induced lethality test. The isolated Compound I was 4-(2-(dimethylamino) ethyl phenol. Isolated Compound I was 70.16% (P<0.01) effective in reducing feces in castor oil induced diarrheal rats and 70.94% (P<0.01) feces reduction in magnesium sulphate induced diarrhea model. Loperamide, a standard antidiarrheal drug, was effective in reducing number of feces by 70.94% in castor oil induced diarrheal rats and 71.77% reduction in feces in magnesium sulphate induced diarrheal rats. Isolated compound I showed 97.67% contraction, at 0.4 ml dose, where as chlorpheniramine showed 100% contraction, at 0.8 ml dose in isolated guinea pig ileum model. Isolated compound I and cetrizine, both, showed 100% protection against histamine induced lethality with no grasping and difficulty in breathing. The isolated compound was pharmacologically active as antidiarrheal and antiasthmatic in tested animals.