Abstract: The marine red alga Pterocladiella capillacea is an economic alga for the food industry in Taiwan, and its associated highly diversified fungi have not been investigated meticulously thus far. The EtOAc extract of the fermented broth of Chondrostereum sp. NTOU4196, a fungal strain isolated from P. capillacea, was found to exhibit significant nitric oxide (NO) production inhibitory activity in lipopolysaccharide-activated murine RAW 264.7 cells at a concentration of 100 μg/mL in the preliminary screening. Therefore, separation of the active principles from the fermented broths was performed, and that has led to the isolation of eight new 5,5,5-tricyclic hirsutane-type sesquiterpenes, namely, chondroterpenes A–H (1–8), together with seven known analogues. They were identified by analyses of spectroscopic data and comparison with literature values. Among the new isolates, chondroterpene A (1) exhibited more significant NO production inhibitory activity in murine BV-2 microglial cells, and of all the isolated compounds, hirsutanol A (9) exerted limited cytotoxic effects and the most potent inhibitory activity on NO production.