<jats:title>Abstract</jats:title><jats:p>Chemical investigation of the EtOH extract of the soft coral <jats:italic>Cespitularia taeniata</jats:italic> <jats:sc>May</jats:sc> collected in Taiwan has resulted in the isolation of two new sesquiterpene lactams, taenialactams A and B (<jats:bold>1</jats:bold> and <jats:bold>2</jats:bold>, resp.), and a new sesquiterpene lactone, taenialactone A (<jats:bold>3</jats:bold>), together with 8<jats:italic>β</jats:italic>‐methoxyatractylenolide (<jats:bold>4</jats:bold>) and atractylenolactam (<jats:bold>5</jats:bold>). The structures of these compounds were determined on the basis of spectroscopic analyses. The <jats:italic>in vitro</jats:italic> cytotoxic activities of the isolated metabolites were tested against KB, Daoy, and WiDr cell lines. A biogenetic pathway for these novel compounds was proposed.