<jats:title>Abstract</jats:title><jats:p>Omphalotins E–I, oxidatively modified cyclic dodecapeptides, were isolated from mycelial extracts of the basidiomycete <jats:italic>Omphalotus olearius</jats:italic>, and their structures were determined by NMR spectroscopic and MS methods. Four of the five omphalotins contained an unprecedented <jats:italic>N</jats:italic>‐hydroxylated tricyclic tryptophan derivative. All compounds exhibited strong and selective nematicidal activity against the plant pathogen <jats:italic>Meloidogyne incognita</jats:italic> with <jats:italic>LD</jats:italic><jats:sub>90</jats:sub> values between 2 and 5 μg mL<jats:sup>–1</jats:sup>. Cytotoxic activities were not detected up to 50 μg mL<jats:sup>–1</jats:sup>. (© Wiley‐VCH Verlag GmbH & Co. KGaA, 69451 Weinheim, Germany, 2009)