A Streptomyces lusitanus DMZ-3 strain with potential to synthesize both insoluble and soluble melanins was detected. Melanins are quite distinguished based on their solubility for varied biotechnological applications. The present investigation reveals the enhanced production of insoluble and soluble melanins in tyrosine medium by a single culture. Streptomyces lusitanus DMZ-3 was characterized by 16S rRNA gene analysis. An enhanced production of 5.29 g/L insoluble melanin was achieved in a submerged bioprocess following response surface methodology. Combined interactive effect of temperature (50°C), pH (8.5), tyrosine (2.0 g/L), and beef extract (0.5 g/L) were found to be critical variables for enhanced production in central composite design analysis. An optimized indigenous slant culture system was an innovative approach for the successful production (264 mg/L) of pure soluble melanin from the droplets formed on the surface of the culture. Both insoluble and soluble melanins were confirmed and characterized by Chemical, reactions, UV, FTIR, and TLC analysis. First time, cytotoxic study of melanin using brine shrimps was reported. Maximum cytotoxic activity of soluble melanin was Lc50-0.40 µg/mL and insoluble melanin was Lc50-0.80 µg/mL.