The secondary metabolites of the saprotrophic wood-decay basidiomycete fungus Granulobasidium vellereum were studied. Six sesquiterpenes were obtained; 2-hydroxycoprinolone (1), 8-deoxy-4a-hydroxytsugicoline (2), 8-deoxydihydrotsugicoline (3), which were previously not described, radulone A and B, and coprinolone ketodiol. Additionally, base-treatment of 1 yielded the diagnostic degradation products 1a and 1b, whereas radulone A was found to form 4 under mild acidic conditions. The structures were determined by NMR, MS, CD and polarimetry, along with biosynthetic considerations. Radulone A fully inhibited the spore germination of the potentially competing fungi Phlebiopsis gigantea, Coniophora puteana and Heterobasidion occidentale at 10μM, 500μM and 100μM, respectively. None of the other substances tested gave rise to any growth inhibition.