A novel Schiff base, namely Z‐3‐((2‐((E)‐(2‐hydroxynaphthyl)methylene)amino)‐5‐nitrophenylimino)‐1,3‐dihydroindin‐2‐one, was synthesized from the condensation of 2‐hydroxy‐1‐naphthaldehyde and isatin with 4‐nitro‐o‐phenylenediamine. It was structurally characterized on the basis of 1H NMR, 13C NMR and infrared spectra and elemental analyses. In addition, Ni(II) and Cu(II) complexes of the Schiff base ligand were prepared. The nature of bonding and the stereochemistry of the investigated complexes were elucidated using several techniques, including elemental analysis (C, H, N), Fourier transform infrared and electronic spectroscopies and molar conductivity. The thermal behaviours of the complexes were studied and kinetic–thermodynamic parameters were determined using the Coats–Redfern method. Density functional theory calculations at the B3LYP/6‐311G++ (d, p) level of theory were carried out to explain the equilibrium geometry of the ligand. The optimized geometry parameters of the complexes were evaluated using LANL2DZ basis set. The total energy of highest occupied and lowest unoccupied molecular orbitals, Mullikan atomic charges, dipole moment and orientation are discussed. Moreover, the interaction of the metal complexes with calf thymus DNA (CT‐DNA) was explored using electronic spectra, viscosity measurements and gel electrophoresis. The experimental evidence indicated that the two complexes could strongly bind to CT‐DNA via an intercalation mechanism. The intrinsic binding constants of the investigated Ni(II) and Cu(II) complexes with CT‐DNA were 1.02 × 106 and 2.15 × 106 M−1, respectively, which are higher than that of the standard ethidium bromide. Furthermore, the bio‐efficacy of the ligand and its complexes was examined in vitro against the growth of bacteria and fungi to evaluate the antimicrobial potential. Based on the obtained results, the prepared complexes have promise for use as drugs.