A re-investigation of the methanolic extract of the aerial parts of Tanacetum santolinoides has resulted in the isolation of a new sesquiterpene, tanacetonic acid (1), along with three known methoxylated flavonoids. The structure of the isolated compounds was secured based on their IR, UV, 1D and 2D (1H-1H COSY, HSQC and HMBC) NMR spectroscopic and FAB mass spectral characteristics. The new sesquiterpene showed a significant cytotoxic activity when tested using the brine shrimp bioassay,while the three flavonoids demonstrated anti-inflammatory effects in the rat paw oedema test.