Two new cyclic peptides, microsporins A and B (7 and 8), were isolated from culture extracts of the marine-derived fungus Microsporum cf. gypseum obtained from a sample of the bryozoan Bugula sp. collected in the U.S. Virgin Islands. The structures of the new compounds were determined by extensive interpretation of 2D NMR data and by chemical methods. Microsporins A and B are potent inhibitors of histone deacetylase and demonstrate cytotoxic activity against human colon adenocarcinoma (HCT-116), as well as against the National Cancer Institute 60 cancer cell panel. The total synthesis of microsporin A on solid-phase is also reported.