A new tetramic acid derivative, paecilosetin (1), along with a recently characterized N-hydroxypyridone, farinosone B (2), was isolated from the fungus Paecilomyces farinosus. Each compound showed activity against the P388 cell line with IC50 values of 3.1 and 1.1 microg/mL, respectively. Paecilosetin was also active against the microorganisms Bacillus subtilis, Trichophyton mentagrophytes, and Cladosporium resinae.