From the methanolic extract of Cladiella sp., collected from the Andaman Island, India, a new sesquiterpene, cladidiol (2), and three known diterpenes, cladiellaperoxide (3), (6E)-2alpha,9alpha-epoxyeunicella-6,11(12)-dien-3beta-ol (4), and polyanthellin A (5) were isolated. The structures of these compounds were established by extensive spectroscopic studies. Compound 2 exhibited modest acetylcholinesterase-inhibition activity, and compounds 3 - 5 showed antibacterial activities against Streptococcus pyogenes, Escherichia coli, and Pseudomonas aeruginosa.