Puupehanol (1), a new sesquiterpene-dihydroquinone derivative, was isolated from the marine sponge Hyrtios sp., along with the known compounds puupehenone (2) and chloropuupehenone (3) that are responsible for the antifungal activity observed in the extract. The structure of 1 was established as (20R,21R)-21-hydroxy-20,21-dihydropuupehenone by extensive spectroscopic and computational methods. Compound 2 exhibited potent activity against Cryptococcus neoformans and Candida krusei with MFCs of 1.25 and 2.50 microg/mL, respectively.