During searching for marine endophytic fungi that have the potential to effectively produce lovastatin using agro-industrial residues, the endophytic Fusarium sp. ALAA-20 was isolated from marine sponge Aplysina fistularis with lovastatin production of 4.51 mg/gds in the solid-state fermentation of rice straw. Lovastatin yield was improved by enhancing approaches including mutation induction and three consecutive cycles of genome shuffling of the producing strain ALAA-20 to obtain the hyperactive recombinant strain FR3/1 with a higher yield of lovastatin (52.1 mg/gds), which is 11.55- and 3.1-fold of the parent strain ALAA-20 and the hyperactive mutant NE21 (16.8 mg/gds), respectively. Moreover, optimization of the solid-state fermentation of oil cakes by the recombinant FR3/1 significantly increased the lovastatin production by 64.19-, 17.23- and 5.56-fold over the selected wild strain (ALAA-20), mutant (NE21) and fusant (FR3/1) prior to the optimization process. Lovastatin obtained from the recombinant FR3/1 strain showed pleiotropic effects such as antibacterial activity against drug-resistant Staphylococcus, Pseudomonas and Klebsiella species and antifungal activity against Candida, Aspergillus, Fusarium and Trichophyton species. New recombinant strain FR3/1 lovastatin showed potent antitumor activity against liver (HepG-2), colon (HCT-116), breast (MCF-7) and lung (A-549) cancer cell lines with IC50 equal to 8.0, 7.2, 4.8 and 9.1 μM, respectively.