The present paper deals with the application of natural dyes extracted from powdered henna (Lawsonia inermis) leaves and madder (Rubia cordifolia) roots on woolen yarn and assessment of effect of stannous chloride mordant on dyeability, color characteristics, fastness properties and antifungal activity of dyed woolen yarn. Sixteen shades have been developed for the characterization of their color characteristics and fastness properties. The color strength (K/S value) has been found to be very good in all dyed woolen yarn samples. The color fastness with respect to light exposure, washing and rubbing was quite satisfactory for both henna as well as madder dyed samples. Henna leaves extract was found very effective against Candida glabrata both in solution as well as after application on wool substrate but no antifungal activity is reported in case of madder both in solution as well as on wool substrate