Rhodiola imbricata is a rare medicinal plant of the trans-Himalayan region of Ladakh. It is used for the treatment of numerous health ailments. Compact callus aggregate (CCA) suspension cultures of Rhodiola imbricata were established to counter extinction threats and for production of therapeutically valuable phenolic compounds to meet their increasing industrial demands. The present study also investigated the effect of jasmonic acid (JA) on production of phenolic compounds and bioactivities in CCA suspension cultures. CCA suspension cultures established in an optimized Murashige and Skoog medium supplemented with 30 g/l sucrose, 3 mg/l NAA, and 3 mg/l BAP showed maximum biomass accumulation (8.43 g/l DW) and highest salidroside production (3.37 mg/g DW). Upon 100 μM JA treatment, salidroside production (5.25 mg/g DW), total phenolic content (14.69 mg CHA/g DW), total flavonoid content (4.95 mg RE/g DW), and ascorbic acid content (17.93 mg/g DW) were significantly increased in cultures. In addition, DPPH-scavenging activity (56.32%) and total antioxidant capacity (60.45 mg QE/g DW) were significantly enhanced upon JA treatment, and this was positively correlated with increased accumulation of phenolic compounds. JA-elicited cultures exhibited highest antimicrobial activity against Escherichia coli. This is the first report describing the enhanced production of phenolic compounds and bioactivities from JA-elicited CCA suspension cultures of Rhodiola imbricata.