Psacalium decompositum was investigated for antihyperglycemic compounds using diabetic ob/ob mice as a model for type 2 diabetes. In vivo bioassay-guided fractionation of an aqueous extract from the roots of P. decompositum led to the isolation of two new eremophilanolides, 3-hydroxycacalolide (1a) and epi-3-hydroxycacalolide (1b). A 1:1 mixture of 1a/1b exhibited antihyperglycemic activity when tested at 1.09 mmol/kg in ob/ob mice. The known furanoeremophilanes, cacalone (2a) and epicacalone (2b), were also isolated from the aqueous extract and were inactive. The known furanoeremophilane, cacalol (3), was isolated from a CH2Cl2 extract of P. decompositum roots and possessed antihyperglycemic activity. The relative stereochemistry in 1a and 1b was assigned 3R,5S and 3S,5S, respectively, based on ROESY data, 3J H-H values, and molecular mechanics calculations. Complete 13C and 1H NMR chemical shifts were assigned for 1a, 1b, 2a, 2b, and 3, and several revisions in 13C NMR assignments for 2a and 3 were made. Results from the conformational analysis of 1a, 1b, 2a, and 2b indicate that each compound exists in one major conformation in solution with H3-12 in a pseudoaxial position.