Chemical examination of an unidentified sponge associated marine fungus Penicillium terrestre resulted in the isolation of eight compounds. Their structures are identified as cyclo (glycyl-D-proline) (1), cyclo (L-prolyl-L-alanine) (2), cyclo (L-prolyl- D-alanine) (3), cyclo (L-leucyl-trans-4-hydroxy-L-proline) (4), cyclo (L-leucyl-cis-4-hydroxy-D-proline) (5), cyclo (L-trans-(4- hydroxyprolinyl)-L-phenylalanine) (6), hexylitaconic acid (7), and hexylitaconic methylate (8), based on spectroscopic analysis (1D, 2D NMR). Compounds 7, 8 were obtained from the genus Penicillium for the first time, while compounds 1-6 were isolated from the fungus Penicillium terrestre for the first time.