A new cytotoxic thiodepsipeptide, verrucosamide (1), was isolated along with the known, related cyclic peptide thiocoraline, from the extract of a marine-derived actinomycete, a Verrucosispora sp., our strain CNX-026. The new peptide, which is composed of two rare seven-membered 1,4-thiazepane rings, was elucidated by a combination of spectral methods and the absolute configuration was determined by a single X-ray diffraction study. Verrucosamide (1) showed moderate cytotoxicity and selectivity in the NCI 60 cell line bioassay. The most susceptible cell lines were MDA-MB-468 breast carcinoma with an LD50 of 1.26 µM, and COLO 205 colon adenocarcinoma with an LD50 of 1.4 µM. Also isolated along with verrucosamide were three small 3-hydroxy(alkoxy)-quinaldic acid derivatives that appear to be products of the same biosynthetic pathway.