The present study describes radical scavenging capacity (RSC), antimutagenic and antibacterial properties of the essential oil (EO) of the leaves of Eucalyptus gunnii Hook. (Southern Montenegro). Chemical composition was evaluated by gas chromatography-mass spectrometry (GC-MS). In oil, 1,8-cineole (67.8%) and α-pinene (14.12%) were the major compounds comprising almost 82% of total EO. EO exhibited moderate DPPH (2,2-diphenyl-1-picrylhydrazyl) scavenging activity, with IC50 value of 7.19 µL/mL. The antimutagenic properties were assayed against the spontaneous and t-BOOH-induced mutagenesis in Escherichia coli IC202 oxyR mutant strain, deficient in removing radical oxygen species (ROS). Reduction of the spontaneous mutagenesis in the presence of E. gunnii EO was only slight, up to 12% at the highest concentration tested. However, when the oxidative mutagen was used, EO displayed more significant reduction of mutagenesis (maximum 23%) in a concentration dependent manner. Antibacterial activity was tested against the selected strains from ATTC and NCIB collections: Staphylococcus aureus, Staphylococcus epidermidis, Pseudomonas aeruginosa, Escherichia coli, Bacillus subtilis, Micrococcus flavus, Klebsiella pneumoniae, and the two Escherichia coli strains from our laboratory collection (SY252 and IB112) using both the disk-diffusion and MIC assays. The greatest sensitivity was shown by M. flavus, K. pneumoniae and E. coli lpcA (MIC = 0.83 mg/mL), while the highest resistance was shown by E. coli (ATTC 25922) and S. epidermidis. This study represents the first report on chemical composition and biological activity of the Eucalyptus gunnii in the South Balkan region and beyond.