Exopolysaccharides (EPSs), a constitutive part of bacterial biofilm, act as a protecting sheath to the extremophilic bacteria and are of high industrial value. In this study, we elucidate a new EPS produced by thermotolerant (growth from 34–44 °C) strain Pseudomonas alcaligenes Med1 from Medano hot spring (39.1 °C surface temperature, pH 7.1) located in the Central Andean Mountains of Chile. Bacterial growth was screened for temperature tolerance (10–60 °C) to confirm the thermotolerance behaviour. Physicochemical properties of the EPS were characterized by different techniques: Scanning Electron Microscopy- Energy Dispersive X-ray Spectroscopy (SEM-EDS), Atomic Force Microscopy (AFM), High-Performance Liquid Chromatography (HPLC), Gel permeation chromatography (GPC), Fourier Transform Infrared Spectroscopy (FTIR), Nuclear Magnetic Resonance (NMR), and Thermogravimetric analysis (TGA). Whole genome of P. alcaligenes Med1 has also been studied in detail to correlate the structural and functional characteristics with genomic insight. The EPS demonstrated amorphous surface roughness composed of evenly distributed macromolecular lumps composed of mainly carbon and oxygen. The monosaccharide analysis has shown the presence of glucose, galactose, and mannose sugars at different ratios. TGA revealed the high thermal stability (315.3 °C) of the polysaccharide. The GPC has shown that Med1 is a low molecular weight polysaccharide (34.8 kDa) with low PI. The 2D-NMR linkage analysis suggests a diverse array of glycosidic bonds within the exopolysaccharide structure. The functional properties of the EPS were evaluated for food industry applications, specifically for antioxidant (DPPH, FRAP an H2O2). Extracted Med1 EPS revealed significant emulsification activity against different food grade vegetative oils (Coconut oil, Corn oil, Canola oil, Avocado oil, Sunflower oil, Olive oil, and Sesame oil). The highest 33.9% flocculation activity was observed with 60 mg L−1 EPS concentration. It showed water-holding (WHC) of 107.6% and oil-holding (OHC) capacity of 110.8%. The functional EPS produced by Pseudomonas alcaligenes Med1 from Central Andean Chilean hot spring of central Chile can be a useful additive for the food-processing industry.