A new indole alkaloid pallidin (1), together with two known compounds cyclo(L-pro-L-leu) and 1,3-dimethylxanthine, was isolated from the marine sponge Rhaphisia pallida. Pallidin is the first naturally occurring N-carboxyindole alkaloid obtained from a natural source. The structures of these metabolites were elucidated by spectroscopic methods, including 13C-NMR, FABMS, HMBC, and mass spectral fragmentation analysis for pallidin (1), and by comparison with literature data for the known compounds.