A new cembranoid, discrepanolide A (1), along with four known cembranoids 2-5 were isolated from the Formosan soft coral Sinularia discrepans. The structures of these compounds were determined by analysis of spectroscopic data and by comparison of NMR data with those of known compounds. None of these compounds were found to be cytotoxic towards a limited panel of cancer cell lines. Compounds 3-5 were found to display significant in vitro anti-inflammatory activity in LPS-stimulated RAW264.7 macrophage cells by inhibiting the expression of the iNOS protein. Compound 5 also significantly inhibited the accumulation of pro-inflammatory COX-2 protein.