A new pyridone alkaloid, militarinone A (1), was isolated by bioassay-guided fractionation from the mycelium of the entomogenous fungus Paecilomyces militaris. Its structure was established by extensive spectroscopic analysis. The compound features an unprecedented side chain and a 1,4-substituted cyclohexyl moiety not previously encountered in microbial metabolites. Militarinone A had a pronounced neurotrophic effect in PC-12 cells at 10 μM concentrations.