A novel minor bisindole alkaloid, racemosin C (1), characterized by a naturally unprecedented 8-hydroxy-2,4,6-cyclooctatrienone ring fused with two indole systems, was isolated from the green alga Caulerpa racemosa, together with one known related metabolite, caulersin (2). The structure of 1 was elucidated on the basis of extensive spectroscopic analysis, and by comparison with the data of related known compounds. A plausible biosynthetic pathway of 1 was proposed. Compounds 1 and 2 exhibited significant PTP1B inhibitory activity with IC50 values of 5.86 +/- 0.57 and 7.14 +/- 1.00 mu M, respectively, compared with the positive control oleanolic acid (IC50=3.03 +/- 0.20 mu M). On the basis of the data obtained, the Caulerpa bisindole alkaloids may be considered as a new class of PTP1B inhibitors.