A novel fatty acid derivative named zooxanthellactone (ZL) was isolated from several strains of symbiotic microalgae, dinoflagellates of the genus Symbiodinium. The metabolite is structurally related to docosahexaenoic acid (DHA) and seems to be biosynthesized by oxidation and subsequent lactonization. The absolute stereochemistry was determined from the specific rotation of the perhydro derivative. The distribution of ZL within several Symbiodinium isolates was quantitatively analyzed by HPLC techniques and suggested a relationship between the productivity of this metabolite and the Symbiodinium phylogeny. The cytotoxicity of ZL was evaluated by using human squamous cell carcinoma cell lines in comparison with that of DHA and other common fatty acids, suggesting that the long unsaturated chain was important rather than the gamma-lactone moiety.