Two new kelsoane-type sesquiterpenes, namely kelsoenethiol (1) and dikelsoenyl ether (2), were obtained from the Formosan soft coral Nephthea erecta. Their structures were elucidated through extensive spectroscopic analyses, ESI orbitrap mass and quantum chemical calculations (QCC). The cytotoxicity against A-459 (human lung carcinoma), P-388 (mouse lymphocytic leukemia), and HT-29 (human colon adenocarcinoma) cancer cell lines of 1 and 2 was evaluated in vitro. Compound 1 showed cytotoxicity against P-388 and HT-29 cells with ED50s of 1.3 and 1.8 μg/mL, respectively.