Carissa carandas L. (Apocynaceae) is widely distributed in tropical and subtropical regions of Asia including Pakistan, India, Afghanistan, and Sri Lanka. C. carandas is considered as an integral component of traditional medicinal systems to combat several health ailments. The present study aimed to assess this plant's phytochemical contents and biological potential by performing sequential extraction, adopting a bioassay-guided approach. C. carandas powder was extracted with n-hexane to remove fatty substances and then residues were sequentially extracted with dichloromethane, methanol, and 50% methanol. All the sequential crude extracts were evaluated for phytochemical contents (total phenolics, flavonoids, and anthocyanins), in vitro antioxidant activity (FRAP, DPPH), in vitro anti-inflammatory activity (serum and egg albumin denaturation), in vivo anti-inflammatory activity (carrageenan- and formaldehyde-induced paw edema), and in vitro antimicrobial activity. Active crude extract was then partitioned using the liquid-liquid separation method followed by further separation of the active fraction by RP-HPLC. The active fraction was then subjected to LC-ESI-MS/MS analysis for tentative identification of bioactive metabolites responsible for its bioactive properties, followed by HPLC quantification. The analysis revealed methanol extract to have more phytochemical contents, radical scavenging properties, reduced inflammation in both models (in vitro and in vivo), and antimicrobial properties against urinary tract infection-causing agents as compared to dichloromethane and 50% methanol extracts. The ethyl acetate fraction obtained after liquid-liquid partitioning (LLP) of the active methanol extract exhibited more activity as compared to C. carandas methanol extract. RP-HPLC sub-fractionation yielded seven sub-fractions, but a slight decrease in biological potential was recorded. Therefore, LLP fraction B was subjected to further analysis. LC-ESI-MS/MS analysis led to the tentative identification of phenolic acids (chlorogenic acid, quinic acid), flavonoids (quercetin), and anthocyanins (peonidin-3-arabinoside, delphinidin-3-galactoside, delphinidin-3-rutinoside) in the active LLP ethyl acetate fraction. Chlorogenic acid, ellagic acid, and quinic acid were quantified as 17.6 µg/mg, 5.90 µg/mg, and 3.30 µg/mg, respectively, on a dry weight basis by HPLC. C. carandas may be considered a promising therapeutic plant, and the results of the current study provide more evidence to support the assertions made in ancient medical traditions. These findings highlight its promising applications in health, medicine, cosmetics, preservatives, and as a natural coloring agent.