Theopalauamide (1) is the major bicyclic peptide from the symbiotic filamentous eubacteria that are found in the interior of Theonella swinhoei from Palau. It was also isolated from T. swinhoei from Mozambique. The structure of theopalauamide was determined by analysis of spectroscopic data, and its stereochemistry was determined by chemical degradation and analysis of the products by chiral GC-MS. The minor peptide, isotheopalauamide (2), was shown to be a stable conformational isomer that was formed by TFA-catalyzed equilibration during the isolation procedure.