Ascidians of the genus Lissoclinum have been an exceptional source of interesting and often biologically active natural products. Lissoclinum patella has yielded cytotoxic cyclic peptides, cytotoxic and antiviral polypropionate-derived macrocycles, and a polyketide lactone. Lissoclinum vareau, a lavender-colored encrusting species collected in the Fiji Islands, is the source of the recently reported bright red heteroaromatic pigments varamine A and varamine B. We now report the benzopentathiepin varacin (1), a novel L. vareau metabolite that exhibits potent antifungal activity against Candida albicans (14-mm zone of inhibition of 2 µg of varacin/disk) and cytotoxicity toward the human colon cancer HCT 116 with an IC50 of 0.05 µg/mL, 100 times the activity of 5-fluorouracil (5-FU) in this assay. Varacin also exhibited a 1.5-fold differential toxicity toward the CHO cell line EM9 (chlorodeoxyuridine sensitive) versus BR1 (BCNU resistant), providing preliminary evidence that varacin damages DNA.