In bioassay-guided searches for novel bioactive natural products from higher plants of the Egyptian flora, two new eudesmane sesquiterpene derivatives, 3alpha-hydroxyilicic acid methyl ester (1) and 2alpha-hydroxy-4-epi-ilicic acid (2), together with 11 known sesquiterpenes were isolated from bioactive fractions of the active epigeal parts extracts of Dittrichia graveolens (L.) GREUTER (Asteraceae) growing in the coastal regions of northwestern Egypt. Four other known sesquiterpene lactones with different carbon skeletons, named 2alpha-hydroxy-2R-xanthalongin (8), 4-epi-isoinuviscolide (9), 8-epi-helenalin (10), and bigelovin (11), were also isolated for the first time from the same source. The stereochemical structures of the isolated compounds were elucidated on the basis of physical and spectroscopic methods including UV, IR, 1H-, 13C-NMR, distortionless enhancement by polarization transfer, 2D NMR, 1H-1H correlation spectroscopy, 1H-13C heteronuclear single-quantum coherence, 1H-13C heteronuclear multiple-bond connectivity, 1H-1H nuclear Overhauser effect spectroscopy experiments, and high-resolution mass spectrometry, as well as some chemical transformations. The antimicrobial, antiinflammatory, and antipyretic activities of D. graveolens extracts and chromatographic fractions were carried out and the various bioactivities of our findings are discussed.